Dividend Growth Stock Overview: CVS Health Corporation

CVS Health Corporation has nearly 10,000 retail pharmacies around the United States.
Photo: Flickr.com/Mike Mozart

About CVS Health Corporation

CVS Health Corporation provides pharmaceutical and pharmacy benefit management services to individuals and businesses throughout the United States and in Brazil. The company has nearly 10,000 retail pharmacies, including nearly 1,700 pharmacies operated from within Target stores. CVS Health has more than 20% of the U.S. retail pharmacy market and fills more than 1 billion prescriptions annually. More than 75 million members participate in pharmacy plans managed by CVS Health.

The company has three reportable business segments: Pharmacy Services, Retail/LTC (Long Term Care) and Corporate. The Pharmacy Services segment operates retail and mail order pharmacies, and specialty pharmacies for individuals that require complex drug therapies; designs and administers pharmacy benefit plans for its clients (including Medicare Part D services); and develops and operates Pharmacy Services information systems. The Retail/LTC segment operates the company’s retail stores and pharmacies under the names CVS, Longs Drugs and Navarro Discount Pharmacy. In addition to dispensing drugs, this segment also provides related services like flu vaccinations and patient counseling. Finally, the Corporate segment provides management and administrative services for the company.

The company is a member of the S&P 500 index and trades under the ticker symbol CVS.

CVS Health’s Dividend and Stock Split History

CVS Health Corporation Dividends

CVS has more than tripled its dividend over the last 5 years.

CVS has paid dividends since at least 1997 and grown them since 2004. The company generally announces dividend increases in mid-December, with the stock going ex-dividend in mid-January. In December 2015, the company announced a 21.4% increase to its payout to an annualized rate of $1.70 per share.

CVS has an outstanding record of dividend growth. Dividend increases since 2007 have all been in the double digits, with most of them in excess of 20%. Over the last 5 and 10 years, CVS compounded its dividend by more than 27% a year, on average.

CVS Health has split its stock twice since 1998. Both were 2-for-1 splits and occurred in June 1998 and June 2005. You’d have 4 shares of CVS stock for each share purchased prior to June 1998.

CVS Health’s Direct Purchase and Dividend Reinvestment Plans

CVS Health Corporation has both direct purchase and dividend reinvestment plans. You do not need to be a current shareholder to participate in the plans. For new investors, the minimum initial investment is $250, either in a single purchase or a minimum of 10 automatic debits of at least $25. Follow on direct investments have a minimum of $100. The dividend reinvestment plan allows full or partial reinvestment of dividends.

The plans are somewhat favorable to investors. New investors will pay an enrollment fee of $7.50. For optional purchases of additional stock, you’ll pay a commission of $2.50 for purchases by check, $2.00 for one-time purchases by automatic debit or $1.00 for recurring purchases by automatic debit. You’ll also pay a 6-cent per share transaction fee. There are no transaction fees or commissions when reinvesting dividends.

When you go to sell your shares, you’ll pay a transaction fee of $15, $25 or $30 depending on the type of sell order, plus a transaction fee of 12 cents per share. There’s a $5 fee to have the monies directly deposited into your account. All fees will be deducted from the sales proceeds.

Helpful Links

CVS Health Corporation’s Investor Relations Website

Current quote and financial summary for CVS Health Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for CVS Health Corporation

 

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2 Comments

  1. FerdiS says:

    They sure make it expensive for you to exit your investment! Thanks for covering CVS. The dividend growth rate is quite impressive!

    Cheers
    FerdiS, DivGro