Walgreen: 4-Star Stocks Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drugstore giant Walgreen (NYSE: WAG  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Walgreen and see what CAPS investors are saying about the stock right now.

Walgreen facts

Headquarters (founded)

Deerfield, Ill. (1901)

Market Cap

$30.5 billion

Industry

Drug retail

Trailing-12-Month Revenue

$71.6 billion

Management

CEO Gregory Wasson (since 2009)
CFO Wade Miquelon (since 2008)

Return on Equity (average, past 3 years)

15.3%

Cash/Debt

$1.3 billion / $5.4 billion

Dividend Yield

3.4%

Competitors

CVS Caremark (NYSE: CVS  )
Rite Aid (NYSE: RAD  )
Wal-Mart Stores (NYSE: WMT  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 2,247 members who have rated Walgreen believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, JohnCLeven, nicely broke down the outperform case for our community:

At a conservative growth rate of 8%, [Walgreen] would earn [$3.70] per share in 2014. Now, let's up that P/E from today's very low 12x to a much more reasonable 15x and you get a share price of $55.50. Add in the, at least, $3.50 in dividends [Walgreen] will pay you over the next 3 years, and you're looking at $59 in value for a $35.63 stock. (An 18.31% compounded annual rate of return). That's a very realistic 65% increase in value in 3 years. The S&P growing 65% in the next 3 years is not realistic. Outperform.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Walgreen may not be your top choice.

We've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.


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