.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear G.L.:

Charlie R. Walgreen got his start as an errand boy for a Galesburg, Ill., drugstore (just up the road a piece from Springfield) and was fired for refusing to shovel snow from the sidewalk. But that didn’t stop him. He bought his first drugstore in 1902 at the age of 29, opened his second store a few years later and by 1916, he owned nine drugstores in Chicago under the name of Walgreens. His stores prospered during the Depression.

Walgreen opened his first store in Illinois, but not in Galesburg; rather, Chicago. And his family name was originally Olofsson, which his dad legally changed for business reasons. There may be a Walter Green in the drugstore business, but there was never a Walter Green who founded Walgreen Co. You lose, and you win.

I like Walgreen Co. (WAG-$32.40). WAG reported record profits for the 2009 fiscal year on higher revenues with 9 percent fewer employees than the prior year.

It’s a dandy company, the largest drugstore chain with $63 billion in revenues. Last year, WAG filled 651 million prescriptions – 1.78 million prescriptions per day or an average of 255 daily prescriptions for each of its 7,000 locations. Pharmacy revenues increased 7.8 percent in 2009 to $42 billion, which accounted for 67 percent of WAG’s total revenues. The company’s prescription growth was more than twice that of the industry average, and WAG continues to increase its market share. Last year, Walgreens was responsible for 18 percent of all retail prescriptions written in the United States, up from 15.3 percent just five years ago. In the next five years, WAG wants that number to be 21 percent.

This year, Walgreens believes it can grow revenues to $67 billion with the help of 300 new stores. Management has had enormous success entering new markets and relocating older stores to new free-standing units, which tend to increase store revenues by 8 percent. Last year was WAG’s 35th consecutive year of record revenues and earnings. This year, the company expects margins to expand on increased revenues of higher margin generics, lower inventory markdowns and even lower labor costs.

However WAG’s in-store health clinics continue to hurt profits and probably cost the company 6 cents per share last year. Still, with the recent purchase of New York-based Duane Reade drugstores, WAG expects earnings to increase from $2.02 per share last year to $2.36 in 2010, Lord willing and the creek don’t flood.

Walgreen Co. is one of those companies that most folks should own in a growth portfolio. The dividend, which was recently raised to 55 cents, “sphinx,” but the common stock offers a handsome upside potential in a three- to-five-year time frame. It may be even better if the rumor of a Rite-Aid takeover becomes fact.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. ©2010 Creators.com