WAG Chart

Background: Walgreen Co., together with its subsidiaries, operates a network of drugstores in the United States. It provides consumer goods and services, pharmacy, and health and wellness services through drugstores, as well as through mail, and by telephone and online. The company trades an average of 5.1 million shares per day and has a market cap of $72 billion.

52-Week Range: $43.31 to $75.16

Competitors include Rite Aid (RAD), CVS Caremark (CVS), Walmart (WMT), and Target (TGT). Rite Aid is in recovery mode and is enjoying a spectacular run this year. On Thursday, Rite Aid announced preliminary first quarter financial results. The news sent shares sharply lower, albeit buyers stepped forward, and the stock was able to close near the high of the day. Shares of Rite Aid are up over 190% in the last year.

Walgreen pays $1.26 annually in dividend payments for a yield of 1.8%. As a pure dividend yield play, I would wait for a pullback to about $71-$72 a share. If the overall market continues to only move higher, Walgreen may not see $70 again, but it's dangerous to think the market is limited to upward motion.

As of the last earnings report, same-store sales were up 4.3% and overall sales climbed 5.1%. Diluted earnings were down slightly. Diluted accounts for an expected increase in the shares outstanding. Using diluted per share numbers is the best indication of what an investor can expect.

The overall market historically fools most of the people most of the time. As soon as the last of the bears throw in the towel the market will drop and you will have a buying dip to enter.

WAG Gross Profit (Quarterly) Chart

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