Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drugstore and pharmacy benefits giant CVS Caremark (NYSE: CVS) has earned a respected four-star ranking.

With that in mind, let's take a closer look at CVS' business and see what CAPS investors are saying about the stock right now.

CVS facts

Headquarters (Founded)

Woonsocket, R.I. (1963)

Market Cap

$40.8 billion


Drug retail

Trailing-12-Month Revenue

$98.2 billion


CEO Thomas Ryan (since April 1999)

CFO David Denton (since January 2010)

Return on Equity (Average, Past 3 Years)


Compound Annual Revenue and Net Income Growth (Over Past 3 Years)

19.8% and 25.9%


$1.11 billion / $11.96 billion

Dividend Yield



Wal-Mart (NYSE: WMT)

Walgreen (NYSE: WAG)

Rite Aid (NYSE: RAD)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 1,660 members who have rated CVS believe the stock will outperform the S&P 500 going forward. These bulls include hollyalley11 and All-Star TMFDeej, who is ranked in the top 1% of our community.

Just last month, hollyalley11 tapped CVS as a rather essential opportunity: "People will always need medicine. The more people, the more demand. CVS is the one pharmacy most thought of by people and even though its earnings have not been great, it will continue to rise."

As one of the nation's largest and most innovative pharmacy operators, CVS clearly stands to benefit from the aging baby boomer demographic and growing health-care spending. And while pricing in the retail segment is only getting fiercer, CVS' operating margins remain slightly higher than those of Walgreen and Wal-Mart, and, of course, completely trounce the struggling Rite Aid's. Additionally, with CVS Caremark having recently signed substantial new business, as well as having settled its drug plan dispute with Walgreen, the pharmacy benefits side of things might finally be looking up.

CAPS All-Star TMFDeej elaborates:

I figured that CVS was attractive enough on its own to be a solid investment for the next several years and that the stock essentially had a free embedded call option in Caremark which it could unlock value in through a spin-off or by improved.

I'm not about to say that the division is firing on all cylinders, but to borrow a phrase from Mark Twain, the rumors of Caremark's death have been greatly exaggerated. The turnaround at Caremark seems to have already begun. ...

Caremark announced that it had reached a twelve-year agreement to manage Aetna's (NYSE: AET) in-house pharmacy benefits operation. In addition to the Aetna contract, Caremark has poached two smaller contracts from rival Express Scripts (Nasdaq: ESRX) The company has now locked up $8.6 billion in net new business for 2011. That's a dramatic turnaround from the $4.8 billion that it lost for 2010.

This investment may not be winning yet, but I have confidence that it will outperform the S&P 500 over the next several years.

What do you think about CVS, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Wal-Mart is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy always gets a perfect score.