Report: No matter which company you pick, retail pharmacy represents strong investment potential
NEW YORK — The drug store sector makes for a sound investment for investors of all stripes, according to a Motley Fool report published Thursday.
In early morning trading Friday, CVS stock traded at $63.59, up 4 cents; Walgreens at $59.16, down 4 cents; and Rite Aid at $5.17, up 4 cents.
CVS/Caremark is positioned as the safest bet with its two-tiered business strategy leveraging retail pharmacy and pharmacy benefit management.
Walgreens is a sound long-term hold because of its dividend history. Walgreens has paid out a quarterly dividend over consecutive quarters dating back some 80 years. And that dividend has increased for 38 consecutive years.
For those with "a higher risk tolerance," Rite Aid represents a strong growth story. "The company has implement[ed] a remarkable turnaround during recent quarters by controlling costs and introducing more generic drugs to boost sales," Motley Fool wrote. "This has materially increased profitability, and Rite Aid investors have benefited from an explosive gain of more than 290% in the stock price over the last 12 months."