My 62-year old aunt called me in a panic a few weeks ago.
“I’m worried about thecrashing because of the government shutdown.”
Sensing she was just looking for a little reassurance, I proceeded to tell her that I viewed anyas a great chance to . I explained that not only is the still higher in the but that in the spend a more time going up than down.
She conceded that made a CVS).of sense. But she still wanted to proceed with caution, adding that the only she wanted to buy was leading domestic drugstore company CVS, Inc. (NYSE:
Although she didn’t realize it, my aunt was making a big statement about.
They makefeel safe. They’re less than smaller companies. And with the at an , are in from looking to curb .
That’s why I want to share one of my favorite WAG) is a virtual blueprint of what to look for in a great . So far, that has fueled a 54% in 2013. Take a look at this. Walgreen Co. (NYSE:
And Walgreen hits all thefor looking for a leader with potential.
Walgreen is an undisputed leader in the domestic . The company operates more than 8,500 locations in 50 states, the District of Columbia Puerto Rico and Guam. That impressive reach, and size creates huge barriers to entrance for any upstart competition that frequently wreaks havoc on technology companies. H are an important of any great .
But even though Walgreen is a leader, the company still has plenty of room to grow. That’s because Walgreen is sitting on an incredible opportunity to expand into international . Up until 2012, Walgreen had close to no international exposure. But recognizing the huge opportunity to take its powerful and into completely untapped international , management executed the biggest in company history, paying $6.7 billion for a 45% in European pharmacy Alliance Boots GmbH.
Theremains on track to have the two companies operating as one by 2015. Management expects to reduce overall by more than $1 billion by 2016 while is expected to top $130 billion. The combination of dominating the U.S. while expanding into international should provide steady for to come. And those are the kinds of consistent are looking for.
Great are built on strength and good . Walgreen is able to execute multi-billion dollar because of its incredible power. As of the last , the company had $2.9 billion in , up almost 50% from just last and $4.5 billion in long-term debt. With a of just 20%, that leaves the company more room to increase operating leverage and grow organically and through additional .
Walgreen is also using its strength to directly reward its through and . In 2011, Walgreen approved a $2 billion that has yet to be tapped. And just last , Walgreen raised its by 15%. That recent hike is in line with company’s goal to carry a 30%-35% dividend payout ratio, supporting a of 2.3%. These are exactly the kinds of -friendly companies that are a great fit for .
(In our latest research, we’ve uncovered several morethat are similar to Walgreens. The companies in our “Top 10 for 2014” dominate their , pay increasing and billions in . Check out our special report on the subject here.)
Unlike glamour like Tesla Motors, Inc. (NASDAQ: TSLA) and Facebook, Inc. (NASDAQ: FB), with sustainable that increase the probability see . And Walgreen definitely fits the bill. In spite of the company’s impressive 54% in 2013, with a of 16 times, directly in line with its and below its peer average of 19. That normalized will help additional growth , another supporting the steady are known for.
Risks to Consider: Walgreen is facing intense WMT). Although the company is smartly diversifying into international , intense domestic will weigh on .in domestic from CVS, Inc. and Wal-Mart (NYSE:
Action to Take --> Walgreen is a great fit for looking for a unique combination of and . are currently trading at an but still look reasonably in light of projected . That makes Walgreens a anywhere below $60.