You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Drugstore giant CVS says it fills one of every eight retail prescriptions in the U.S. And Edward Kelly, an analyst at Credit Suisse, says the chain is filling its own prescription for success by making smart acquisitions, generating solid sales growth and bolstering its competitive advantages. The investment firm added the stock to its "focus list" on Wednesday.
CVS, which generates 70% of sales from prescription drugs, should benefit enormously from an aging population and increasing use of pharmaceuticals. As the largest drugstore chain in the country by store count (more than 5,400 at last word), the Woonsocket, R.I., company is in a strong competitive position. Its sheer size and economies of scale should enable CVS to make life difficult for smaller rivals.
CVS has been expanding through acquisitions. The Eckerd stores it acquired in 2004 represent a significant -- and underappreciated -- opportunity to boost earnings, in Kelly's view. CVS agreed earlier this year to purchase about 700 Sav-on and Osco stores from Albertsons, boosting its presence in southern California. Both deals, Kelly says, contribute to a robust earnings outlook.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In addition to operating the stores, CVS boasts a large pharmacy benefit management business. Businesses enlist PharmaCare to help provide drug coverage to insurance-plan participants. This subsidiary won a contract this week to provide mail-order, specialty-pharmacy and other services to certain employees of automaker DaimlerChrysler. Kelly says winning the contract is a defining moment for CVS because it bestows credibility on the benefit management business and sets the stage for additional wins.
The stock (symbol CVS) gained 4% on Wednesday. At $30, it trades at 19 times analysts' average earnings estimates for 2006 of $1.57 per share, according to Thomson First Call. That's an attractive price according to Kelly's analysis. He thinks the shares can rise to $35 over the next 12 months.
--Lisa Dixon
-
The Bear Market Protocol: 3 Strategies to Consider in a Down MarketThe Bear Market Protocol: 3 Strategies for a Down Market From buying the dip to strategic Roth conversions, there are several ways to use a bear market to your advantage — once you get over the fear factor.
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
These Were the Hottest S&P 500 Stocks of the YearAI winners lead the list of the S&P 500's top 25 stocks of 2025, but some of the names might surprise you.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
