Wednesday, August 6, 2014

Is WAG, Walgreens a bargain?

August is a good time to look for bargains in the stock market.

For instance, in 2012 Walgreens, symbol, WAG qualified as a Dividend Machine.

While WAG sports a very aggressive history of increasing dividends, the yield has not kept up with the price.  Look at Wednesday's action (8/6/2014) and you see that even with an almost 10% correction, their yield is still only 2.13%, hardly a 2014 Dividend Machine.   Is WAG a bargain?

WAG Covered Calls

Walgreens is a bargain as an income stock if you supplement your income with covered call income.

WAG meets all dividend machine criteria expect for the yield.   If you buy WAG around $59.25 and you can sell an October $65 call your income of $.80 from the call premium increases your income to an acceptable level.   See the table below for details of this trade.

Consider WAG, a 2012 Dividend Machine for the income producing portion of your portfolio.