Walgreen Company (WAG)

dereleek (< 20) Submitted: 10/05/06 2:33 PM : Start Price: $42.19 WAG Score: -5.84

no debt, 6000 (and growing) locations on the busiest corners, 15% of the retail prescription market in the u.s., convenience, service, flexible hours, drive thru and customer retention programs (express pay, auto refill, internet storefront) and a nationwide network allows retirees to travel without the need to bring their entire drug history with them. In-out convenience and the above mentioned points far outweigh the risks associated with Walmarts generic pricing structure. These new prices will definitely impact operating margins of those stores located close to walmart outlets (with pharmacies). the existence of these walgreen-walmart paired locations are the exception and not the norm. Walgreens locations generally appear on tight corners on a small footprint with easy access from multiple angles close to city centers and retirement communities; real-estate parameters not in line with Walmarts strategy. at a current PE of 24.83, a dividend increase of 22% from a year prior and a declared dividend increase of 14% in 2007, and a commanding prescription u.s. market share, WAG is a perfect case of understated performance and will reward those who realize the current bargain.

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