Oh, those long lines at CVS (NYSE:CVS), I hate 'em! But I keep going back for more. Apparently, lots of people do, as the drugstore company reports both higher profits and that it will add a little extra change to its dividend on Wednesday.
So I have a love/hate relationship with CVS; why do I go back? For one thing, it's super-convenient; mine's a two short minutes from home. And another thing, every time I've tried to fill a prescription at my neighborhood Safeway (NYSE:SWY) while I'm grocery shopping, for example, I've been told they don't have it in stock. CVS has never left me in the lurch when I had an allergy med emergency or a bad bug that needed busting, and when you're really sick, you need to know you'll get your prescription. CVS has established itself as an expert in the field, with prescriptions making up about 70% of its sales.
CVS reported earnings higher by 15%, at $187.8 million or 46 cents per share, compared to $164.4 million, or 40 cents a share, in the year-ago quarter. These results lined up with Wall Street's estimates. Overall sales came in higher by 8.5% at $6.38 billion.
The magic number appears to be 15, as the company also said it will up its quarterly dividend by that percentage, which will add up to 26.5 cents per share per year. (And, of course, if dividend-yielding stocks sound like good medicine to you, you might consider a monthly dose of The Motley Fool Income Investor newsletter.)
The good earnings showing shouldn't come as a shock. Jeff Hwang highlighted rising sales at CVS in early October, and Dave Marino-Nachison commented last month on the heated rivalry between CVS and drugstore giant Walgreen (NYSE:WAG). Way back in July, the Fool forecast good times ahead for the chain.
CVS shares hit a new 52-week high of $36.21 in Wednesday's trading, though they ended the day at $35.93. Whatever CVS is doing, it appears to be doing it right, and customers are lining up. And, I might add, those lines seem to be moving more quickly these days.
Alyce Lomax welcomes your feedback at [email protected].
