NEW YORK ( TheStreet) -- Walgreen ( WAG) hiked its dividend by 27% on Wednesday to 17.5 cents. The drugstore will now pay dividends of 70 cents, up from 55 cents. The next dividend is payable on Sept. 11 to shareholders of record on Aug. 19. "We are confident in our growth strategies and our ability to generate strong free cash flow in the future," CEO Greg Wasson said in a statement. Shares of Walgreen are gaining 0.6% to $29.29 in midday trading. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.