Can CVS Caremark Corp?s (CVS) promise of rising dividends and share buybacks make up for its seemingly interminable struggles with a four-year-old acquisition?
It hasn?t so far. Investors clearly are fed up with the drug store company?s inability to properly integrate Caremark, a pharmacy benefits management company it purchased for $21 billion in 2007. Last month?s announcement of disappointing annual CVS earnings ? held down once again by Caremark ? led to familiar post-results selling in the shares.
But these shares are undervalued, according to YCharts Pro. In fact, our Large Cap Value model shows CVS, market cap about $45 billion, as one of the most attractive of the major shares today. Management?s plans to fork over a lot of cash to shareholders over the next five years, plus signs of improvement at Caremark, lead us to agree.
CVS?s store chain, which with 7,000 outlets is second only to Walgreens
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