CVS and Rite Aid are the two best retail drugstore chains in the United States. Both of these drug stores face long-term challenges and near-term challenges that push Wall Street to put their stock into the discount trash. So, which is better amongst both for the new cash flow? The question still puzzles the stockholders the most. So, let's put them together in the chamber of comparison to get some clear view about this.
Let’s First Head Down to Rite Aid
Rite Aid for many years, hasn't headed in the right direction. It faces the tough competing time in an ever-changing environment of the retail pharmacy landscape. Plus, the entry of Amazon.com further makes the situation not so controllable for Rite Aid. Immense competitive pressure hit badly, and all the profit disappeared into the black hole.
CVS Health Still Ruling the Platform
CVS Health is the huge competitive niche of pharmacy. It is repeatedly hitting the cash flow and return the money to the shareholders. It was so thus through the CVS stock buybacks and growing dividend. CVS continues to make a profit and hitting the sky.
Annual Data by Ycharts of RAD Revenues
According to the recent estimation, Rite Aid's sales graph keeps declining during this year and, sadly, next year. The profit line will remain at the bottom of the red zone. In simple terms, Rite Aid doesn't expect to have growth anytime or soon. But the story is entirely different for the myhr.cvs.com health. Even though CVS is facing the competition like Rite Aid, still CVS health is going on the right way to achieve significant growth.
Rightly, the biggest move made by CVS health was the $70 billion acquisition of the health insurer Aetna. This was necessary to help their business expand in a diverse direction and reduce dependency on the pharmacies. However, the company is still trying to digest the procurement now; event management keeps promising to save extra bucks.
When it is put together with the other growth inductees, Wall Street will believe CVS health will receive a 30% profit annually for the next five years. We cannot categorize both of these businesses in growth stock right now, but it clearly shows CVS health promises to win the profit. Same thing we cannot agree with the Rite Aid.
Stock Trade Value
Rite Aid and CVS health both of them badly performed the S&P 500 within the last five years. The worst of these returns is that both underperform on the stock trade at cheap valuations. That's clear that Rite Aid is generating losses in recent times and even though it faces the same in the next two years. That's why Rite Aid doesn't have the P/E ratio. However, the Rite Aid's price to sale ratio, which is only 0.02, tells about how the wall street values Rite Aid now.
Whereas, CVS health trade values are much more impressive and higher than that of Rite Aid. This is because the company is gaining profit. Another best thing is its P/E value is excellent compared to the average of the S/P 500. The fact is the stock of both are cheaper at this moment. But the Rite Aid is not so worthy of investing in their inventory.
Dividend Data by the Ycharts
CVS health growing dividend recently combines the stocks with the collapsing share prices to get the solid yield, which is around 3.6%. And this is twice from the average value of the company in the S/P 500. Moreover, you probably have noticed that the share of the CVS health is achieving the spike now. This is entirely attributable to the Aetna Buyout. However, this is not such great news for the stock investment. But the long-term investment trend clearly shows that CVS Health will achieve its stock back in huge quantities.
Let's see the Dividend of Rite Aid. As we can see that Rite Aid is ultimately experiencing the fall down even though the company's share is higher than that of CVS Health. What's more, Rite Aid endorsed a 1 for the 20 reverse stock split that isn’t strong companies do even.
So, after the overall comparison of stock value, dividend, and growth, CVS clearly hit the platform in all three categories. Although neither of the businesses running to win right now. Still, CVS won over Rite Aid. The investor can do better with the CVS stocks today, and our focus is on CVS Health.