I purchased 68 shares this morning @ 28.99 / share and a YOC of 3.8% before commissions. I also sold 2 Oct 20 ’12 $28 Puts @ 1.20/share. If the puts get assigned in Oct. I will own 268 shares of WAG at an average cost of 27.36 with a total YOC of 4.02% before commissions. I realized that with a lot of puts I have sold, I would have been better off buying the company so I decided to do both today. If WAG’s price rallies I don’t want to miss the opportunity to own some at a good price. Walgreens is a dividend champion and has raised dividends for 36 straight years.
I have been watching Walgreen’s (WAG) for a while and decided to pull the trigger today on weakness. The stock has dropped about 10% since it announced it is buying a 45% stake in Alliance Boots for 6.7 Billion (4B in cash plus 83.4M shares). I’m guessing this drop was due to dilluting the outstanding shares by about 10% (they have about 850M outstanding shares by my calculations). WAG also increased the dividend 22.2% to 27.5 cents per share yesterday.
I had planned on holding off on any new purchases until July but I missed out on some deals a few weeks ago and I can’t let this great deal slip away.
This is from their website:
DEERFIELD, Ill., June 19, 2012 – The board of directors of Walgreen Co. (NYSE:WAG) (NASDAQ:WAG) today announced an increase in the quarterly dividend of 22.2 percent to 27.5 cents per share from the previous rate of 22.5 cents per share. The dividend declared by the board is payable Sept. 12, 2012, to shareholders of record Aug. 17, 2012. The increase raises the annual dividend rate from 90 cents per share to $1.10 per share.
Here is an update of my open options:
03/12/12 Sold 1 AZN Oct 20 ’12 $45 Put @ 3.00
03/28/12 Sold 3 BBVA July ’21 ’12 $7 Puts @ .55
04/09/12 Sold 1 VOD July 21 ’12 $27 Put @ 1.45
04/30/12 Sold 1 PG July 21 ’12 $62.50 Put @1.42
06/20/12 Sold 2 WAG Oct 20 ’12 $28 Puts @ 1.20