"The bottom line
Walgreen currently seems to be a much better investment than CVS when considering future prospects. Its huge deal with AmerisourceBergen gives it economies of scale that beat CVS.
While Walgreen is already the largest drugstore in the U.S., its strategic deal with Alliance Boots gives it a huge head start internationally over CVS and cements its place as the first-and-largest global drugstore in the world--now with a heavy presence in Europe and a growing foothold in emerging markets.
When looking at valuations, both companies look expensive if considering trailing P/E ratios, and look cheap going forward when keeping annual estimated earnings in mind. Walgreen distinguishes itself from CVS, however, with its explosive dividend growth and track record over the years. If I'm going to pay the same price relative to earnings, I want the better option between the two.
Walgreen is set up nicely to be the dominant global drugstore, and it will be hard to knock it down. If CVS retains 60% of Walgreen's former customers from the Express Scripts fallout, Walgreen might not notice much 10 years down the road. CVS appears to be attempting to play checkers in a chess game, while Walgreen is already setting up for the check-mate.
CVS might still make a good play to capitalize on U.S. demographics and Obamacare, but Walgreen (as of now at least) is king of the drugstore castle. It will be hard for another company to dethrone an already well-established, global leader-- and this is why I believe Walgreen will most likely continue to outperform."