Is Walgreen Company (WAG) Innovating Itself into Oblivion?

CVS Caremark Corporation (NYSE:CVS) is also doing quite well. Its net revenues increased by 15% and its earnings per share increased by 22% between 2011 and 2012 (CVS). Its first quarter results were even better, with operating profits increasing 21% and earnings per share increasing 28%. (CVS) CVS is in a sense the most logical alternative to Walgreen because they are both profitable, growing pharmacies with established positions in the industry. CVS Caremark Corporation (NYSE:CVS) has a lower price-to-earnings ratio and has seen grown faster recently, however. It may not be as “innovative” or “cool” as Walgreen Company (NYSE:WAG), but innovation that’s harming a company is far worse than the expansion of a well-established, successful way of doing business.


To sum things up, one should think twice before investing in Walgreen Company (NYSE:WAG). Its main competitors are growing and doing better than they did last year. Walgreen, however, is not doing as well. It is trying to reinvent itself, but so far the changes have not produced stellar results. CVS Caremark Corporation (NYSE:CVS), Rite Aid Corporation (NYSE:RAD), and GNC Holdings, on the other hand, are doing better now than they were a year ago. They appear poised to take advantage of the strong growth in demand resulting from the aging of the baby boomer generation.

The article Is Walgreen Innovating Itself into Oblivion? originally appeared on and is written by Paul Sangrey.

Paul Sangrey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Paul is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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