top drug store

In his Sept. 29 "Stop Trading!" segment, Cramer said Walgreen and CVS (CVS) were flu-shot plays. According to Cramer, customer traffic doubled with flu-shot recipients, who are prone to impulse purchases.

This is not the case of a supermarket where Wal-Mart can offer amazingly low prices (I was there this weekend, and the dry food prices are out-of-control cheap), nor is it like the $4 drug prices that take away from Walgreen (WAG) and CVS (CVS).

good company

With earnings scheduled for Tuesday, Walgreens get the chance to prove that its performance matches the other retail pharmacy plays this year.

raised its dividend by 22.2% to 13.75 cents/share, and has increased its quarterly dividends for 34 consecutive years.

a 22.2% quarterly dividend increase from 11.25 cents to 13.75 cents, payable on September 12, 2009, to shareholders on record as of August 21, 2009.

Last week was not entirely cheerless. Walgreen (WAG), the largest U.S. drugstore chain by revenue, boosted its quarterly common payout 22.2%, to 13.75 cents a share from 11.25 cents, for a 1.91% yield. The enhancement will put $99.2 million more in investors' pockets. Deerfield, Ill.-based Walgreen, which was founded in 1901, has paid dividends since 1933, and now has sweetened them for 34 years in a row. Disbursements have risen by an average compound annual rate of more than 21% over the last five years. CEO Gregory D. Wasson said the dividend boost "reiterates our confidence in our key growth strategies and our ability to generate strong free cash flow." He also said Walgreen is "well-positioned to emerge from the current recession even stronger than we entered it." The Big Board-listed stock trades around 29, and has a 52-week range of 37.85 to 21.28.

Market Perform - Price 29.72 on June 23
by Barrington Research

Walgreen remains engaged in a significant restructuring initiative designed to put the company back on a double-digit long-term EPS growth track beginning with fiscal 2011. The company is accelerating some elements of its plan, leading to a greater negative impact on earnings in the short term. The company reported Q309 earnings that were below expectations and below the prior year, as higher expenses related to restructuring activities and lower gross margins more than offset an 8% revenue increase. Earnings of 53 cents per share (including 6 cents in restructuring costs, off-set by 6 cents in restructuring benefits) declined 8.8%, from 58 cents a year ago -- [and the recent earnings missed] our estimate of 58 cents and the Street's 56 cents. Third-quarter revenue of $16.2 billion, up 8% from last year, was in line with our estimate. Same-store sales improved to 2.8%, from 1.3% in the second quarter, driven by pharmacy [growth of] 3.8% and front-end [growth of] 0.8%. Total prescriptions filled grew 8.3%, reflecting market-share gains... versus an industry-wide growth rate of 2.6%. Market cap: $29.4 billion.

The drug store owner is slated to release their fiscal 3rd quarter earnings on Monday. Analysts consensus is for 0.56 cents bolstered by cost cutting efforts.

dividends

no growth

forget it

52 week LOW

Solid growth, lousy stock

losing money

Overloved, under executing

Long term growth company that disappointed last quarter

have first to control their costs

slow mover