CVS gets nearly all its revenue from its drug sales and services, including a pharmacy benefits manager. CVS has transformed into the biggest prescription-drug dispenser, along with running health-care clinics.
"CVS continues to gain pharmacy market share," said FBR Capital Markets analyst Steven Halper. "Its focus is on providing health services to consumers."
One trump card is its specialty pharmacy, where revenue grew 28 percent in the second quarter. Muken expects specialty revenue to continue to grow in relative significance over the next several years versus other revenue components, since CVS makes more money from specialty classes of drugs.
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CVS is consolidating the drug revenue streams as well. Earlier this year it bought Omnicare, which manages drugs for senior-living facilities, and Target's retail pharmacies. The upshot: CVS will soon operate one in seven retail pharmacies, according to Pembroke Consulting.
"CVS has a long-term structure that Warren Buffett would look for," Ransom said. "It's one U.S. health care stock to own."
When CVS opted to stop selling tobacco this year, it wasn't a surprise to those who have been watching the shift in its business mix. Tobacco contributed only slightly to its $140 billion in 2014 revenues, and the very public move only amplified its brand as a health care company.
"CVS has enormous cash flow, is buying back shares, and has made good acquisitions," Mushkin said.