Good Times Ahead for Major Drugstore Chains
By George Anderson
A large population in need of medications to address the numerous health issues that come along with advanced age is just one reason the two largest U.S. drugstore chains have reason for optimism.
Another is the higher margins that come with selling higher profit generic versions of the name brand drugs once their patents have expired.
Both Walgreen and CVS have posted impressive operating results for many years.
Walgreen, which has focused on growing primarily through organic measures, has had 31 straight years of increasing sales and profits.
CVS, which has focused more on acquisitions than its larger rival, has developed a reputation for buying stores and making them more profitable than they had been under previous ownership.
According to a report in The Wall Street Journal, analysts expect profits at the two chains to grow 14 percent (CVS) and 15 percent (Walgreen) over the next five years.
Moderator’s Comment: What do you see as the respective strengths of Walgreen and CVS? –
George Anderson – Moderator
- Drugstore Drama: Will CVS Narrow Its Valuation Gap With No. 1 Walgreen? – The
Wall Street Journal (sub. required)