The number of high quality stocks out there offering a dividend between 2% and 3% are many - finding a company like CVS Health Corporation (NYSE:CVS) which provides such a dividend with an impressive long term growth profile is hard to do.
CVS has seen better days - since hitting its high in 2015, the company's market capitalization is approximately two-thirds of what it once was, with many investors steering clear of anything to do with bricks and mortar retail, favoring the growth and margin e-commerce retailers provider relative to the old guard like CVS.
That being said, CVS has continued to plug along, with its planned acquisition of Aetna providing investors with an interesting vertical which will push this company deeper into the healthcare space in the U.S. and provide the potential for synergies which could turn out to be much more substantial than many investors think in this space.
The primary pharmacy business for CVS needs a boost, and investors who once piled into this name as one of the premier pharmacy companies in the U.S. are beginning to grow weary of the rising cost of health-care story which has become political.
The extent to which pharmacies will be able to participate in price increases and margin expansion over the long term remains a significant question for shareholders; however, I believe CVS could provide interesting value for dividend investors over the long run given the company's potential to grow earnings in a more holistic sense in the long term, allowing for more diversified and higher quality earnings growth over time.
Invest wisely, my friends.
