CVS Health Corporation (CVS), together with its subsidiaries, provides integrated pharmacy health care services. It operates through Pharmacy Services and Retail/LTC segments. The Pharmacy Services Segment provides a range of pharmacy benefit management (PBM) solutions. The Retail Pharmacy segment includes retail drugstores, online retail pharmacy Websites and its retail healthcare clinics.
The company announced that it is raising its quarterly dividend by 17.60% to 50 cents/share. This is the fourteenth consecutive annual dividend increase for this dividend achiever. In addition, with a new $15 billion share repurchase authorization, the company now has more than $18 billion authorized to be used for share repurchases over the next few years.
Over the past decade, the company has managed to boost dividends at a rate of 25.40%/year. This is some impressive dividend growth out there for CVS Health shareholders. However, I would expect that this rate of annual dividend growth to slow down a little over the next decade. If CVS Health managed to grow dividends at a rate of 10%/year, supported by strong earnings growth from here, I would be a happy camper.
This was supported by a solid 12.30% average increase in annual EPS over the past decade, and a low payout ratio. I analyzed the company in November, and initiated a position around that time. Please check my analysis of CVS Health for more information about the company.
Currently, CVS is attractively valued at 16.40 times forward earnings and a yield of 2.50%. I took advantage of the huge sell-off last month and initiated a small new position in the stock. Given the rapid increase in dividends, I think that the stock is a good value today.
Full Disclosure: Long CVS and WBA
Relevant Articles:
- CVS Health (CVS) Dividend Stock Analysis
- Dividend Growth Investing At Work
- The predictive value of rising dividends
- How to value dividend stocks
- Seven dividend companies bringing holiday joy to shareholders
Popular Posts
-
Dollar cost averaging is a process, where the same amount of funds is allocated to preset investment/s at regular intervals of time. It is ...
-
Warren Buffett’s Berkshire Hathaway just received a dividend check for $194 million dollars from Coca-Cola. Berkshire Hathaway owns 400 mil...
-
As an investor, I am aware that I have a lot of blind spots. Someone with a glass half full outlook on life might say that I have a lot of r...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps in monitoring existing positions a...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps in monitoring existing positions a...
-
The Procter & Gamble Company (PG) provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Groomi...
-
One of my favorite charts shows a listing of eleven consumer goods companies, and the brands that they own. It reinforces my belief that str...
-
The goal of this website is to inspire readers to identify their goals and objectives, and then create a process to achieve them. I shared t...
-
As dividend growth investors , our goal is to buy shares in a company that will shower us with cash for decades to come. One of the importan...
-
I review the list of dividend increases as part of my monitoring process. This exercise helps me monitor existing holdings. It also helps me...