A Big Upgrade for Walgreen

Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track records of the firms behind them -- so individuals can make better investing decisions.

In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 115,000 members, many of whom demonstrate better investing insight than published analysts do.

More top-performing CAPS members are singing bullish tunes on Walgreen (NYSE: WAG  ) these days, enough to upgrade it from its long-held four-star rank to a more formidable five stars. A total of 1,583 investors have given their opinion on Walgreen, with many of them offering analysis and commentary explaining the recent optimism.

No doubt about it, Walgreen has a great track record of growth and shareholder dividends. Not only has the stock appreciated faster than the market in the past decade, but the dividend has grown at an annualized rate of 11.2% in the past 10 years. The company recently upped its dividend again by 18%. Though competitor CVS Caremark (NYSE: CVS  ) , which just announced it would purchase Longs Drug Stores (NYSE: LDG  ) , also raised its dividend, not all direct competitors have performed as well -- Rite Aid (NYSE: RAD  ) has no dividend and significantly lags its peers.

But just as other discount retailers like Target (NYSE: TGT  ) and clothing retailers like Macy’s (NYSE: M  ) are feeling the weakening economy, Walgreen has struggled in the face of more frugal consumers. Walgreen’s management committed to shape up and reduce high expenses last year, and the effort has delivered a modest but credible 2% rise in year-over-year profits for its fiscal third quarter. And though the ever-encroaching Wal-Mart (NYSE: WMT  ) threatens the prescription-drug space, CAPS members still favor Walgreen for its reasonable P/E of 17, long history of consistent growth, and favorable outlook for the next five years. More than 94% of CAPS members rating Walgreen expect it to outperform the market going forward.

To see what the very best CAPS analysts are saying now about Walgreen -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.

More Foolishness:

Wal-Mart Stores is one of dozens of stocks recommended by the Motley Fool Inside Value team to beat the market going forward. To see what other stocks are trading below intrinsic value, check out a free 30-day trial of the newsletter service today.

Fool contributor Dave Mock recently upgraded his pole-vaulting skill to "keep dreaming." He owns no shares of companies mentioned here and is the author of The Qualcomm Equation. The Fool's disclosure policy can clear a 16-foot bar without breaking a sweat.


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