Dividend Aristocrat Overview: Walgreens

About Walgreens

Walgreens has served customers since 1901. Photo courtesy Brandon Bartoszek/Eridony via Flickr

Walgreens has served customers since 1901.
Photo courtesy Brandon Bartoszek/flickr.com.

Walgreens is the nation’s largest drug store chain, with over 8,000 drugstores and 240,000 employees across the United States serving 6.3 million customers daily.  Walgreens also operates related facilities such as specialty and mail service pharmacies, home health care facilities, and worksite health facilities.  In fiscal year 2013 (from September 2012 to August 2013), Walgreens earned $2.45 billion, an increase of 15% over the prior year, on revenues of $72.2 billion.

Walgreens began operating in Chicago in 1901 when Charles R. Walgreen opened Walgreen’s drugstore on Chicago’s South Side.  Over time the company expanded, growing to 20 stores by 1919 and exploding to over 500 stores by 1929.  The company went public in 1927 and continued to expand, albeit at a slower pace, eventually opening its 1,000th store in 1984.  Today the company continues to expand, and in the company’s 2012 fiscal year opened a net 175 stores.

Note: On December 30, 2014, Walgreens merged with Alliance Boots GmbH of Switzerland to form Walgreen Boots Alliance, which combines drugstore chain Walgreens, European retail pharmacy leader Boots, international wholesaler and distributor Alliance Healthcare. In the merger, Walgreens is now a wholly – owned subsidiary of Walgreen Boots Alliance, and Walgreens stock was converted into Walgreen Boots Alliance stock in a one-for-one exchange. The new stock now trades on the NASDAQ under the symbol WBA.

Walgreens Dividend and Stock Split History

Walgreens has paid out dividends for over 81 years and began increasing dividends 38 years ago, in 1976.  Walgreens met the Dividend Aristocrat criteria of 25 consecutive years of regular dividend increases in 2000.  Since 2003, Walgreens has increased their dividend payment in the 3rd quarter of the calendar year and most recently in the 3rd quarter of 2013 increased their dividend by 14.55%, from an annualized rate of $1.10 to $1.26.  Walgreens is expected to announce their next dividend increase in July to be paid out in September.

Walgreens has multiplied its stock dividend 8-fold since 2004.

Walgreens has one of the best dividend growth records of all the Dividend Aristocrats, having multiplied its dividend 8-fold since 2004.  (2014 dividend is projected.)

Walgreens stock has one of the best dividend growth records of all the Dividend Aristocrats.  With the exception of a six-year period from 1997 – 2002, Walgreens has increased their dividend by at least 10% per year since 1987.  From 2003 – 2012, Walgreens had annualized dividend growth rates of at least 18.4% per year.  Since becoming a Dividend Aristocrat in 2000, Walgreens has annualized dividend growth of 18.1%.  With 5 and 10-year dividend growth rates of 23.2% and 22.0%, Walgreens stock dividend has more than doubled since 2009 and gone up six-fold since 2004, from $0.21 to $1.26 per year.  Walgreens 20 and 25-year dividend growth rates of 14.6% and 25.6% demonstrate the company’s extraordinary long term record of returning earnings to shareholders.

Walgreens split its stock 2 for 1 nine times: in September 1963, September 1967, February 1982, January 1983, May 1985, February 1991, August 1995, August 1997, and in February 1999.  An investor who purchased a single share of stock in 1976 when the company began regularly increasing the dividend would now own 128 shares and received dividends of $151.04 in 2013.

Direct Purchase and Dividend Reinvestment Plans

Walgreens has both direct purchase and dividend reinvestment plans.  Investors interested in participating in either of these plans can find information at ComputerShare’s Investment Plan site.  The minimum initial investment amount for new investors is $250 and $50 for recurring investments through direct debit.  The minimum for additional investments is $50.

The plans have both purchase and sales fees.  There is a $10 initial setup fee. The transaction fee for the direct purchase plan is either $5 for check purchases and $1.50 for automatic investments.  There is also a 10 cent per share transaction fee for direct stock purchases. However, Walgreens pays all transaction fees on stock purchases through dividend reinvestments.

When selling shares, an investor will pay 12 cents per share sold along with a transaction fee of between $15 and $30 depending on the type of sale (i.e., market order, batch order or day limit order).  There is an additional $5 fee for the direct deposit of sales proceeds into your account.  Investors can minimize fees by buying and selling shares in larger quantities.

Helpful Links

Walgreens Investor Relations Website

Current quote and financial summary for Walgreens (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Walgreens

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