On June 19, the company increased is quarterly dividend 22.2% to $0.27 cents per share. The dividend is payable Sept. 12, 2012, to shareholders of record Aug. 17, 2012. The increase raises the annual dividend rate $1.10 per share. The yield based on the new payout is 3.6%.
Walgreen's President and CEO Greg Wasson was quoted in the release saying, "We are increasing our dividend in line with our commitment to return cash to shareholders and consistent with our previously stated goal of a long-term dividend payout target of 30 to 35 percent of net earnings."
The company's stock dropped 5.85% Tuesday. The positive dividend news was not enough to offset in-line quarterly results with same-store sales dropping 6.6% due to the loss of Express Scripts (ESRX) business.
Even with this dividend increase, I am still not ready to buy. At least not until I fully understand the financial implications of the loss of its pharmacy benefit management contract with Express Scripts.
Full Disclosure: No position in the aforementioned securities. See a list of all my dividend growth holdings here.
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