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.

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.

Conclusion

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 Fool.com 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.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.