Can CVS Continue To Grow Its Dividend Post Aetna Acquisition?

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Introduction - Acquisition and Dividend overview CVS Health Corporation (CVS) is an integrated pharmacy healthcare company with 9,709 retail locations, 1,674 of those locations are inside of Targets. In December 2017, it announced that it would purchase Aetna (AET) for $69 billion as part of a ongoing strategy to create "community-based health hubs" and move away from the image of a retail drug store.
CVS has grown its dividend payout 14 straight years. But recipients were alarmed when the Q1 2018 dividend was announced at 50 cents, marking 5 straight quarter at 50 cents. The last time CVS has gone more than 4 quarters without a dividend increase was during the great recession of 2008. Currently CVS is paying a 2.61%.
Aetna has had recent success growing its dividend, it has increased its payout every year starting in 2011. Currently Aetna is paying a 1.08% dividend.
There is a concern that this acquisition lacks synergies, and without being able to eliminate a lot of expenses post merger, will the newly formed company be able to continue to grow its dividend from CVS' current 2.61% yield? Or will the newly formed company have to cut its dividend and the yield fall... Read more

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