Dividends
Walgreens, the largest drugstore chain in the U.S., upped its quarterly common dividend by 27.3%. It will now stand at 17.5 cents per share; previously at 13.75 cents. This continues a remarkable streak for Walgreens. Since 1933 it has always paid dividends and for the past 35 years it has always boosted them. Over the past six years, disbursements have grown by an average compound annual rate of 24.3%. There is a reason many consider Walgreens one the most stable investments and its recording does not fail to lend credence to that notion. Net lease investors should be encouraged by these results as they testify to Walgreens continued success and ever growing popularity among net lease buyers looking for long-term steady cash flows.
Store Sales
June same store sales rose 2% for Walgreens. This marks a reversal of declines in the two proceeding months. A 2.2% increase in discretionary sales at the stores front end was highlighted as the reason. Overall sales increased by 8.4% to $5.67 billion; Duane Reade was not included in same store sales. These trends bode well for Walgreens which has always maintained a strong pharmacy component (sales increased by 1.9% in June) but has seen front end discretionary sales suffer recently due to the recession. Though clearly not a substantiated trend, this could represent a positive sign for the future.
Moody’s Lifts Credit Outlook
Due to the resolution of the recent prescription plan conflict between Walgreens and CVS Caremark, Moody’s has lifted Walgreens credit out look from negative to stable. The fight, which would led to two pharmacy chains refusing to fill each others prescriptions, was resolved when Walgreens agreed to participate in CVS Caremark’s benefits program. This settlement has prevented a “sizeable loss” from Walgreens revenue.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
