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Subject:  Re: Walgreen (WAG) Date:  10/3/2012  7:53 PM
Author:  BruceCM Number:  7553 of 11221

As dividend growers goes, they don't come much better than WAG. Consider the following data....

22.3% annual average dividend growth since 1986, which has been increasing, as the following dividend growth shows:

2011-12: 25% (if Nov dividend = Aug dividend)
2010-11: 28%
2009-10: 25%
2008-09: 21%
2007-08: 20%
2006-07: 21%
2005-06: 21%

Op FCF payout ratio has crept up slightly from 12% in 2008 to 18% over the past two years

Net (or sustainable) FCF payout ratio has gone from 20% in 2009 to 31% over trailing 12 months.

I look at a lot of dividend paying stocks, and frankly, I don't recall ever seeing stronger fundamentals in dividend growth.

But the real question is, can WAG keep it up?

Most of the anlysts I've read are concerned that the Express-Scripts debaucle is a harbinger of things to come, as downward competative pressure on drug prices continues and more retail outlets work their way into this market...particlularly those fathomless discounters like Costco and Walmart, where pharmceutical margins are thin and volume makes them profitable.

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