Is Walgreen’s Stock A Buy Now?

Walgreen is down 4.60% while the S&P 500 is down .15%. Year-to-date, Walgreen is up 3.72% while the S&P 500 is up 14.43%. Over the past calendar year, Walgreen is up 5.38% while the S&P 500 is up 20.94%. When you look at three-year returns, Walgreen is down 8.50% while the S&P 500 is up 37.58%.

At $33.33, Walgreen is trading $1.59 lower than its 50-day SMA of $34.92. It’s trading $1.36 lower than its 100-day SMA of $34.69. It’s only trading $.42 lower than its 200-day SMA of $33.75.

E = Earnings And Revenue Have Been Impressive  

The consistent annual revenue growth that Walgreen has seen over the past five years is a great sign.

      2008       2009       2010       2011       2012
Revenue ($)in billions

59.03

63.34

67.42

72.18

71.63

Diluted EPS ($)

2.17

2.02

2.12

2.94

2.42

 

Quarterly revenue and earnings have been steady.

     8/2011      11/2011      2/2012      5/2012      8/2012
Revenue ($)in billions

17.97

18.16

18.65

17.75

17.07

Diluted EPS ($)

.87

.63

.78

.62

.39

 

T = Trends Support The Industry

Walgreen is one of the most recession-proof stocks you can own. The same can be said for CVS. While both stocks were hit during the Financial Crisis in 2008, they weren’t hit as hard as most stocks. They dropped almost the same amount as Procter & Gamble (NYSE:PG), which is arguably the most recession-proof stock in existence.

Conclusion

Walgreen pays a good dividend and has a Forward P/E of 9.12. This is a stock that has rewarded investors for decades. While the last 12 years haven’t been nearly as impressive as prior years, owning a safe dividend-paying stock is always a nice addition to any portfolio.

Based on all the factors listed above, Walgreens is an OUTPERFORM.

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