Shares of CVS Health Corp. rose 0.6% in premarket trading Thursday, after the drug store chain and health care services company announced at its Investor Day a $10 billion stock repurchase program, a 10% boost to its dividend and lifted its full-year earnings outlook. The annual dividend rate was raised to $2.20 a share from $2.00 a share, which increases the implied dividend yield at Wednesday’s stock closing price to 2.36% from 2.15%, which compares with the implied yield for the S&P 500 of 1.31%. CVS said it was the first time it increased its dividend and repurchased stock since 2017. Separately, the company said it now expects 2021 adjusted EPS of “at least” $8.00, compared with previous guidance of $7.90 to $8.00, and that the revenue outlook was raised to “at least” $290.3 billion from $286.5 billion to $290.3 billion. The FactSet consensus is for EPS of $7.96 and revenue of $288.4 billion. The company also presented its strategy to make health care “more convenient, personalized and affordable,” which included advancing primary care delivery capabilities, launching new all-payer health products and services, driving a digital-first approach to expand its reach and enhancing omnichannel health services. The stock has rallied 36.3% year to date through Wednesday while the S&P 500 has gained 25.2%.
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