In sum, in the first quarter, CVS reported a profit of $956 million, or 77 cents a share, up from $776 million, or 59 cents a share, a year earlier. So the company continues to be a good bet for the rest of 2013. Since the beginning of the year the share price has climbed from $51 and change and now hovers at $58.50. As with its competitor Walgreen Company (NYSE:WAG), this might be a good time to take some profits.
However, the P/E ratio of 13.2 is still lower than its ten year average o 22.4. The current ratio is also less than the current S&P ratio of 17.7. In the final analysis, CVS Caremark Corporation (NYSE:CVS) stores account for about 50% of sales, and the outfit fills more than one billion prescriptions a year – 20% of total U.S. retail pharmacy sales. The share price still has room to grow for the rest of 2013.
The Bottom Line
The retail pharmacy business, along with the broader health care sector, is a good place for investors to be in what remains a shaky economic recovery. In other words, retail pharmacies have the Rx: profits.
The article Retail Pharmacies Have the Profit Remedy originally appeared on Fool.com and is written by Kyle Colona.
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