Walgreen doubling dividend every 3 years

U.S. drugstore chain, and a stock that I have recently added to, Walgreen (WAG) has just raised their quarterly dividend 27.3% to $0.175 / share.

"This increase reinforces our commitment to provide meaningful returns to our shareholders and extends our track record of annual dividend growth" said CEO Greg Wasson

He was not joking about their track record. Walgreen has increased their quarterly dividend for 35 consecutive years. The company has also growth their dividend at a compound rate of 24.3% over the past six years.

Last year I blogged about how they nearly doubled their dividend since 2006. While in 2008 they raised it by 18%.

Walgreen shares are still pretty cheap trading at $29.30 (a P/E of 14x). I picked up some shares recently for about $26.50 (P/E of 12.7x). Interestingly enough Walgreen has not historically been known as a good dividend payer to hold as the yield on the stock was always well south of 2%. Given this latest increase the stock is now yielding about 2.4%, on my purchase the stock was yielding 2.6%, and on the financial crisis lows of March 6, 2009 the stock yielded a whopping 3.2% considering today's increase.