Magic Formula Showdown: Why CVS Beats Qualcomm and Valero for Retirees

1 hour ago 4

Trey Thoelcke

Mon, June 29, 2026 astatine 6:20 AM CDT 5 min read

Quick Read

CVS Health leads this Magic Formula ranking for retirees; Valero's guardant P/E of 9 tempts but ace spread-driven net marque income unreliable.
Qualcomm's 38% automotive gross maturation and 36% instrumentality connected equity impress, but its 1.6 beta and 18% monthly stock diminution disqualify it for retirees.
The Magic Formula screens for cheapness and quality, but retirees indispensable furniture successful dividend stableness and debased volatility earlier selecting halfway portfolio holdings.
Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Qualcomm didn't marque the cut. Grab the names FREE today.

Joel Greenblatt's Magic Formula, popularized successful The Little Book That Beats the Market, ranks stocks connected 2 factors: net output (operating net divided by endeavor value) and instrumentality connected superior (how efficiently a concern converts invested dollars into profits). For status investors, Magic Formula scores are lone the starting point. Income reliability, concern durability, and volatility substance equally. A bargain-screened sanction tin inactive beryllium incorrect for a retiree if currency flows plaything with commodity cycles oregon if its aggregate assumes maturation that whitethorn not arrive.

HOW CVS HEALTH, VALERO, AND QUALCOMM STACK UP FOR RETIREMENT INVESTORS'. It features 3 colored panels each with a banal name, a enactment graph, applicable icons, and slug points detailing fiscal metrics and characteristics. CVS Health (CVS) has a blue, steadily rising graph with a shield and coin icons, described arsenic 'DEFENSIVE & RELIABLE'. Valero Energy (VLO) has an orange, wavy graph with an lipid tube and occurrence icons, described arsenic 'DEEP VALUE & CYCLICAL'. Qualcomm (QCOM) has a green, highly volatile graph with a machine spot and Wi-Fi awesome icons, described arsenic 'QUALITY & VOLATILE'. Below these panels, 2 gears labeled 'EARNINGS YIELD' and 'RETURN ON CAPITAL' provender into a equilibrium standard labeled 'RETIREMENT SUITABILITY'. The root is '24/7 Wall St. Analysis, Data arsenic of June 29, 2026. Not concern advice'.

Below is simply a countdown of 3 candidates, ranked from slightest to astir due for a retirement-focused portfolio.

3. Qualcomm: Quality astatine a Quality Price

Qualcomm (NASDAQ: QCOM) is the classical Magic Formula prime stock: precocious gross margins, precocious returns connected equity, and a fortress licensing business. Trailing instrumentality connected equity is adjacent 36.1%, operating borderline astir 22.1%, and EV/EBITDA astatine 14.7. Q2 FY26 delivered non-GAAP EPS of $2.65 connected gross of $10.599 billion, with grounds Automotive gross of $1.326 billion, up 38% twelvemonth implicit year.

The status occupation is volatility and yield. Shares fell 16.2% successful the past week and 23.9% successful the past month, with a beta of 1.596. The dividend output is conscionable 1.9%, and handset gross contracted 13% past 4th connected representation proviso constraints and China exposure. A large business, but not a retiree's anchor holding.

Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Qualcomm didn't marque the cut. Grab the names FREE today.

2. Valero Energy: Cash Machine, Cyclical Risk

Valero Energy (NYSE: VLO) is wherever the Magic Formula surface lights up brightest. A guardant P/E of 9, EV/EBITDA of 8.7, and instrumentality connected equity of 15.9% harvester to awesome beardown net output and respectable superior efficiency. Q1 2026 EPS deed $4.22 against a $3.16 consensus, refining margins expanded to $14.90 per barrel, and absorption returned $938 cardinal to shareholders portion raising the quarterly dividend 6% to $1.20.

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