Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

CVS Caremark Corporation (CVS) Earnings Preview: A Great Company For The Next Ten Years And Beyond

Page 1 of 2

CVS Caremark Corporation (NYSE:CVS) is the largest chain of drug stores in the U.S., with approximately 7,300 stores in 41 states, Puerto Rico, and Washington, D.C.  For such an established company, CVS has done an excellent job of creating shareholder value.  In fact, a more shareholder-friendly company is tough to find!  With the company set to report earnings next Wednesday, I don’t foresee any major surprises; rather, we should see an affirmation of the company’s commitment to growth and its investors.

CVS Caremark Corporation (NYSE:CVS)Over the past decade, CVS’ share price has climbed from a low of $10.92 in 2003 to its current level of around $52, a gain of 375% in ten years time.  Also during that time period, the company raised its dividend each and every year, and bought back a considerable amount of shares.

CVS is either the number one or two pharmacy chain in 73 of the 100 largest markets in the United States, and filled over 658 million prescriptions last year, representing a 20% share of the entire market.  Pharmacy sales are CVS’ largest revenue source by far, accounting for 68% of sales, with OTC products contributing an additional 11%.  In other words, all of the other “stuff” they sell at CVS (magazines, candy, groceries, photo services, etc.) only makes up 21% of the company’s sales.

The company is also the largest operator of retail health care clinics under its MinuteClinic brand.  This is an area where the company foresees a lot of growth, since they have stated plans to open 100 new clinics a year for the next five years.

In addition to the growth the company plans to see from its MinuteClinics, the company plans to increase its presence in the largest U.S. markets.  With the incredible presence of CVS, it may surprise some to know it has stores in 92 of the top 100 markets, leaving some room for expansion there.

The company also likes to grow through acquisitions.  Most notably, CVS acquired Caremark Rx for $26.5 billion in 2007, Longs Drug Stores in 2008 for $2.9 billion, and most recently the UAM Medicare Part D business last year for $1.3 billion.  These acquisitions are very significant because they have allowed CVS to enter markets it had not previously had a large presence in.

For example, when CVS acquired Longs it instantly made CVS the largest drug store chain in both California and Hawaii ,and greatly strengthened its presence in Arizona and Nevada.

As mentioned before, CVS has consistently increased its dividend for every year over the past decade (see below).  Since 2003, the stock’s yield has increased from 12 cents per share to 90 cents currently.  I would be very surprised if we did not see an increase for 2013.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!