CVS Health is hiking its dividend and offering a better-than-expected 2022 revenue forecast as the health care giant prepares to dive deeper into providing more care.
The drugstore chain, pharmacy benefits manager and health insurer is planning its next “major evolution” by expanding into areas like primary care, CEO Karen Lynch said in a statement Thursday ahead of the company’s annual investor meeting.
The company says it intends to add advanced primary care centers to its mix of drugstores and “HealthHUB” locations it started introducing a few years ago. Those stores can include employees like dietitians and are already trying to provide more health services to customers.
Drugstore chains like CVS Health and rival Walgreens and other health care companies like UnitedHealth Group Inc. have been pushing deeper into providing health care. They want to be seen as regular resources to guide customers through the complicated U.S. care system.
They also want to help customers keep up with their health and control chronic conditions like diabetes or high blood pressure before they more expensive medical problems.
Walgreens, for instance, is attaching hundreds of VillageMD primary care practices to its stores over the next few years.
CVS Health CEO Karen Lynch said in early November that while primary care makes up a small part of overall costs, “it wields significant influence on the total medical cost picture.”
“We really believe that we need to kind of push into the primary care so that we can influence the overall cost of care,” she said.
On Thursday, the company also said that it will increase its annual dividend by 10% from $2 to $2.20 starting in February. The company also has approved a $10 billion share repurchase program and said it was the first time CVS Health has made either move in about four years.
CVS Health expects adjusted earnings of $8.10 to $8.30 per share next year on $304 billion to $309 billion in total revenue.
Analysts expect, on average, earnings of $8.24 per share on $301.2 billion in sales for 2022, according to FactSet.
Shares of Woonsocket, Rhode Island-based CVS Health Corp. climbed more than 2% to $95.39 in premarket trading.