DEERFIELD, Ill. — The board of Walgreen Co. has given the green light to a new $2 billion share repurchase program and approved a 28.6% hike in the quarterly dividend, the biggest in the company’s history.
Walgreens said Wednesday that it has raised the dividend to 22.5 cents per share from the previous rate of 17.5 cents. The new dividend is payable on Sept. 12 to shareholders of record as of Aug. 19.
With the increase, the annual rate climbed from 70 cents per share to 90 cents per share, according to the company.
Meanwhile, Walgreens said the new $2 billion stock buyback plan authorized by its board is scheduled to expire Dec. 31, 2015. It comes as the company announced the completion of a $1 billion share repurchase program unveiled last October.
"This is our third share repurchase program announced since October 2009. Since then, we have completed $3 billion in share repurchases and paid $1.1 billion in dividends to shareholders," Walgreens president and chief executive officer Greg Wasson said in a statement. "We have continued to deliver on our commitment to return cash to our shareholders consistent with our capital policy guidelines."
Walgreens said it has paid a dividend in 315 straight quarters, or more than 78 years, and has raised its dividend for 36 consecutive years. The company noted that since the beginning of fiscal 2007, its annual dividend rate has risen from 31 cents per share to 90 cents per share, resulting in a compound annual growth rate of 23.8%.
Rival drug store chain CVS Caremark Corp. also has stepped up share buybacks and hoisted its quarterly dividend.
This year CVS Caremark expects to complete a $2 billion share repurchase program authorized last June. And in January the company announced a 43% increase in its quarterly dividend.
