CVS's Stock Gets a Boost From Raised Divided, Improved Profit Outlook

CVS Health Corp.'s gained 2% in light premarket trade Wednesday, after the drugstore chain revised higher its 2016 adjusted earnings-per-share outlook to $5.73 to $5.88 from $5.68 to $5.88. The FactSet EPS consensus is $5.82. The company said it was will raise its quarterly dividend by 21% to 42.5 cents a share next year, with the first new dividend payable Feb. 2 to shareholders of record on Jan. 22. Based on the stock's Tuesday closing price of $92.59, the new annual dividend rate would imply a dividend yield of 1.8%, compared with the S&P 500 dividend yield of 2.2%, according to FactSet. The company also said it expects to buy back $4 billion worth of its shares in 2016, and free cash flow of $5.3 billion to $5.6 billion. The stock has lost 3.9% year to date, while the S&P 500 has eased 0.8%.