2003 Sales: $32.5 billion
2012 Sales: $72.2 billion2003 EPS $1.13 2011 EPS: $2.64 You've likely noticed that there are a lot more drugstores in your neighborhood than there were a decade or two ago. For many consumers, short trips to the grocery store have been replaced by trips to the druggists, which now stock many items a grocer would anyway. Walgreen (WAG), which operates 7,900 drugstores across the U.S, has been a clear beneficiary of the trend. Sales, operating cash flow and net profits have all risen in lockstep over the years, hitting record levels in 2011. Yet shares, trading at a recent $35, are actually the peaks seen a decade ago. That's because investors fret that growth will invariably slow as the drugstore sector get saturated. However, Walgreen still has a few arrows left in its quiver: The company should continue to benefit from the ongoing migration towards generic drugs (which carry higher profit margins for drugstores). And this is an industry that continues to consolidate: management aims to keep profits growing through the pursuit of accretive acquisitions. Shares, which traded for 35 times trailing earnings back in 2003 now trade for a much more reasonable 13 times trailing earnings.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV