Recently, CVS (CVS 1.61%) made a major move into the metaverse that appears to be quite compelling. In this video clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on March 22, Fool.com contributors Rachel Warren and Travis Hoium discuss the healthcare giant's ambitious plans to offer its products and services, including telehealth, in a virtual world.
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Rachel Warren: Apparently, CVS filed to trademark its pharmacy and health clinics in the metaverse and it is the first of these massive drugstore chains to do so. Apparently, CVS is looking to patent its stores along with sales of virtual goods including prescription drugs, wellness, beauty, and personal care products again, all in the metaverse.
The interesting thing about this as well was that when it filed the U.S. Patent and Trademark Office, this article says, "CVS is looking to trademark its logo and to provide an online store as well as downloadable virtual goods." Those virtual goods could include health products, prescription drug products, beauty products. In addition, CVS is also trying to bring the health services it provides in its in-store clinics and its telehealth platform to the virtual setting reported CNBC.
In the filing, the company points to providing nutrition and wellness coaching so non-emergency medical treatment services. There was a quote saying, "All these Fortune 500 companies are making trademark filings with the idea of how are we going to play on this platform." This was a quote from a founding partner of a major law firm and he was saying, "I don't think I've seen anything in the last couple of months that's been like this CVS filing as a virtual healthcare clinic."
Essentially, it will be interesting to see what this actually looks like in practice that CVS is trying to not only patent virtual versions of the products that you can easily find in its various store locations. But also somehow make this transition for its telehealth services into the metaverse. Again, expanding this whole idea of being what could healthcare look like in the metaverse? Could it again democratize access for consumers? I think that's a really interesting question.
CVS recently reported their full-year results for 2021. This is not a super high-growth stock, although I will say it pays a really nice dividend of about 2%, which is just a little bit higher than the average stock trading on the S&P 500. To my surprise, shares of the company are actually up nearly 50% over the trailing 12 months. Kind of slow, but steady growth there.
In the full-year 2021, CVS grew its revenue 8.7% compared to 2020. Again, one of those classic healthcare stocks you can look at for slow but stable growth. Operating income was positive as well following the previous year.
Another thing that really stuck out to me that CVS had acquired Aetna a few years back and that healthcare benefits segment is bringing in a lot of growth for the company so revenue in just its healthcare benefits segment alone was up almost 9% year-over-year in 2021. Pharmacy services were also up 8% for revenue for the full-year 2021.
This is an interesting company. I love the healthcare space, you guys might talk about it a lot. You're not generally going to find super high-growth stocks within this space, but what you will often find are really stable businesses. They generate consistent growth. Often pay a dividend and sell those products and services that people need on a consistent basis so CVS definitely fits the bill on that front.
Travis Hoium: Would the idea here be that they're basically Teladoc (TDOC 2.73%), but then also have the IRL or in real life pharmaceutical services so like if I'm sick, I can go into the metaverse, let's say, and they can try to diagnose me somehow? Then they can actually ship me or maybe I can go pick up a prescription without the hassle of going to the doctor. I mean, that seems compelling.
Warren: I think so. It's a little fuzzy, because of course this is very early days, but that's what that appears to be. You can go to CVS and you can get your prescriptions and you can get whatever products you need. But presumably within this metaverse version of CVS, you can actually download virtual versions of those products. Then its idea is also to transition some of those telehealth services it offers as well.
Hoium: You can get into VR therapy things. It's an interesting because the other thing I've learned enough about the healthcare space to know that it's really complicated. A company like CVS, something like if you want insurance companies to pay for something like metaverse services like this, what better way to do that than own your own insurance company. It's an interesting play on the metaverse becoming a utility in the healthcare space because they have the ability to do that. Whereas if you're a start-up, and you're going, "Hey, we're going to offer this great service. But we have no way to make revenue."
Warren: There's no experience.
Hoium: I feel like we talked about this last week with a couple of things where it's like breaking in is so hard, but they're established. If they want to be an innovator, they have a leg up on the competition.