Don't make a mistake, this is a good sector at this time of the year
Patient population is increasing every day and if you can find a good pharmacy that has good evaluation, balance sheet, cash flow, growth and dividend then you can sleep well at night. WAG has all above and more. CVS may have some but it is not as good as WAG. WAG price should be around or better than CVS.
Yes, WAG was a little business unfriendly last year when it could not make a deal with ESRX and that hurt WAG while other pharmacies benefited. That era is behind WAG. On contrast to previous strategy, WAG is going after customers and businesses very aggressively that may hurt other pharmacies in the same way other pharmacies benefited from WAG. So, watch out for WAG since it has turned on its progress engine and you may see 30% appreciation in the stock price by sometimes next year while you can collect your dividend.
WAG is not the company that it used to be. The PBMs like ESRX are cutting into the margins on Rxs. Now WAG is in a price war with CVX as WAG attempts to regain its lost customers, with more margin erosion.
Then, there is the issue of growth. Where can WAG put new stores? They end up locating stores very close together and cannibalization results.
Now, they have the problem of integrating 3,000 stores in the UK and Europe. They probably overpaid, considering that the European recession keeps getting worse.
Like all retailers, WAG must face a recession in Europe, and soon, in the US.
You could do worse than owning WAG. The recession will eventually end and demographics are strongly positive. WAG will eventually get back to $45, as inflation kicks in when the economy improves. In the meantime, WAG pays a very nice dividend.
I have done very well trading WAG from the long side for many years. I don't expect much over the next year. I would buy it at $34.50 and sell it at $37.50.
ESRX is a middle man that takes away some profit but compare to number of patients added each year and high margin profit from generic, wag is ok or it will do better than olds days.
Your argument about growth is not correct since in spite of ESRX separation, wag revenue for the year was close to its last year. This year, wag will do much better, especially where wag has joined preferred network and probably other plans.