New Purchase – CVS
On Wednesday I created a post looking back at the stock picks I made in September and how they are doing now. I also mentioned 2 stocks I was watching and thinking of starting a position in. Check out that post here.
The other day I started a new position in CVS. I purchased 17 shares for a all in cost of $1270.99 USD. With a yield of 2.74% it will increase my yearly dividend income by 34.00 usd. The company will pay me in February, May, August and November. This is nice because I need to pump up those months. Currently I’m to poor to drip this company but will be adding to this position in the future.
CVS has dropped even more since I made the purchase offering a great buying opportunity in my opinion. The stock ex dividend date is October 23rd so you can get in now and get a dividend in November.
So why did I buy CVS?
Recently rumors have came out again that Amazon is going to start selling prescription drugs. (Lately alot of my buys have been pullbacks based on the amazon effect) While amazon has a tonne of money to spend, I think there will be a lot of hurdles to overcome. How can you prove who you are actually selling the prescription too? Have you went to a pharmacy round here lately? even cold medicine gets locked up.
Anyways pharmacies stock prices dropped on the news. On October 5th CVS closed at 80.90 per share. Today 9 days later its at 72.60. CVS is now only $3.00 over their 52 week low. The have also boosted their dividend for the last 14 years. Not as long as Walgreen’s but their 10 year dividend growth rate sits at 27% a year. MMMMMMMMMMM! The baby boomer’s are also aging and will need more drugs.
What is CVS?
CVS Health Corporation, together with its subsidiaries, is an integrated pharmacy healthcare company. The Company provides pharmacy care for the senior community through Omnicare, Inc. (Omnicare) and Omnicare’s long-term care (LTC) operations, which include distribution of pharmaceuticals, related pharmacy consulting and other ancillary services to chronic care facilities and other care settings. It operates through three segments: Pharmacy Services, Retail/LTC and Corporate. The Pharmacy Services Segment provides a range of pharmacy benefit management (PBM) solutions to its clients. As of December 31, 2016, the Retail/LTC Segment included 9,709 retail locations (of which 7,980 were its stores that operated a pharmacy and 1,674 were its pharmacies located within Target Corporation (Target) stores), its online retail pharmacy Websites, CVS.com, Navarro.com and Onofre.com.br, 38 onsite pharmacy stores, its long-term care pharmacy operations and its retail healthcare clinics (Source RBC direct investing)
I feel its a great buy at the moment. It seems like it could keep going lower on the sentiment but who knows where the bottom is. Morningstar gives it a fair value of 109.00 USD. That’s a nice amount of profit if it go’s to fair value. Like always do your own research I’m no pro. Have a great weekend!
Keep stacking those Dividends, Cheers!
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.