This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

CVS Caremark Corp (NYSE: CVS) -- with 6,200 stores and a pharmacy benefits management division -- beats Walgreen Co. (NYSE: WAG) -- with 5,997 stores -- hands down in the battle of the brands. It's bigger, its earnings are growing faster, it has a higher P/E and its stock has grown faster over the last year and five years. Walgreen wins on one measure: it has a fatter profit margin.

Here's how the two score on these measures:

• Revenues. $76 billion (CVS) beats $54 billion (Walgreens)
• Earnings growth. 12% (CVS) beats 6% (Walgreens)
• Profit margins. 3.8% (Walgreens) beats 3.45% (CVS)
• P/E. 21.3 (CVS) beats 17 (Walgreens)
• One year stock performance.+16% (CVS) beats -22% (Walgreens)
• Five year stock performance. +250% (CVS) beats +16% (Walgreens)

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Vote in our poll for CVS or Walgreens as your preferred brand, and let us know in the comments why you love it.

CVS Caremark (NYSE: CVS) is no longer looking for new acquisitions, but rather will focus on assimilating recent acquisitions, Chairman and Chief Executive Thomas Ryan said on Wednesday. While speaking to the Reuters Health Summit in New York (check out the blog for the conference here), Ryan said, "It's most important that we stay focused on the integration, the execution and getting our balance sheet in order, and then we will have the opportunity to look at opportunistic acquisitions."

CVS acquired giant pharmacy benefits manager Caremark in March and continues to integrate recent drugstore chain purchases.

It sounds like the company has its hands full given the amount of M&A work CVS has done over the past couple of years combined with the organic growth the firm is seeing. While fierce competitor, Walgreen (NYSE: WAG), is considering applying the brakes in terms of opening up new doors, CVS is in full-throttle mode right now.

It must not be much fun to compete with Wal-Mart (NYSE: WMT) in the prescription drugs business. The world's largest retailer keeps dropping prices.

Today, Wal-Mart said it would extend its $4 generic drug program to include a number of additional treatments for "problems including glaucoma, attention deficit disorder, fungal infections and acne," according to MarketWatch. For other items like birth control pills, it will charge $9 against a national average of $30.

Wal-Mart says that the program will save consumers $600 million over the next year, with some of the savings being tremendous. While antifungal Lamisil cost an average of $337.26 one month ago, its generic equivalent, terbinafine, sells at Wal-Mart for $4 for a commonly dispensed quantity of up to a 30-day supply, the company said.

The low-cost drugs raise the question of whether Wal-Mart makes money on them at all. It may use the price points to drive traffic to its stores. If so, companies like CVS Caremark (NYSE: CVS) would watch their stock prices take a beating.

The generic prices also raise the issue of unfair competition. If Wal-Mart does offer the drugs at below cost, is it building an antitrust case for other companies?

The new pricing may be good for consumers, but that doesn't mean the government won't look into it.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MOST NOTEWORTHY: MRU Holdings (UNCL), CVS/Caremark (CVS), Medco Health (MHS) and Blackboard (BBBB) were today's noteworthy initiations:

• Kaufman Bros. expects MRU Holdings (NADAQ: UNCL) to post a profit in Q4 for the first time due to its first student loan securitization and started shares with a Buy rating and $9 target.

• Thomas Weisel believes shares of CVS/Caremark (NYSE: CVS) represent a compelling risk/reward at these levels, initiating shares with an Overweight rating and $51 target, given the positive trends in the market and the likelihood of successful merger integration.

• Thomas Weisel believes Medco Health (NYSE: MHS) is well positioned to capitalize on continued generic conversions, starting shares with an Overweight rating and $100 target.

• Banc of America would be buyers of Blackboard (NASDAQ: BBBB) current levels, initiating shares with a Buy rating and $50 target, given the company's defensible business model and market leadership position.

OTHER INITIATIONS:

• UBS started Gaylord Entertainment (NYSE: GET) with a Neutral rating.

• Leerink Swann initiated Phase Forward (NASDAQ: PFWD) with a Market Perform rating and $19-$20 valuation range.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Pharmaceutical retailer CVS Caremark (NYSE: CVS) said before the open that its second-quarter profit spiked to $720.1 million, or 47 cents per share, more than doubling from last year's profit of $334.4 million, or 40 cents per share. The latest figures edged out analysts' per-share estimates of 46 cents. This report marked the first time that Caremark's results were included for a full three-month reporting period - CVS acquired the pharmacy benefits concern in March.

Revenue surged 95% to $20.7 billion, just above Wall Street's consensus target of $20.6 billion. Same-store sales jumped 5.7%, with pharmacy same-store sales rising 5.7% while sales of "general" items, including candy and cosmetics, were up 5.9%.

Looking ahead, CVS expects the merger to add between eight and 10 cents to full-year 2008 earnings per share, and contribute 14-18 cents in 2009. For the current year, CVS officials project retail pharmacy sales to rise 12%-15%, with full-year earnings per share falling in a range between $1.86 and $1.91.

During the latest reporting period, CVS Caremark opened 37 new stores, closed 15 existing locations, and relocated 30 stores. At the close of the quarter on June 30, there were 6,177 retail pharmacy stores under the CVS umbrella, located in 44 U.S. states and the District of Columbia.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

CVS Caremark Corp. (NYSE: CVS) opened at $37.49. So far today the stock has hit a low of $37.20 and a high of $37.61. As of 11:10, CVS is trading at $37.45, down $0.35 (-0.9%).

After rising to a one year high of $39.44 late in May, the stock has turned downward over the past several trading days. A Standard & Poor's analyst recently commented on the improving drug retail sub-industry, saying that national drugstore chains like CVS are poised to benefit from the current industry trends. Though CVS has been a strong performer, the stock recently broke below the trend-line it has been following since March, and could have some difficulty moving higher in the near term. However, with the positive outlook from S&P, it is probably unlikely that CVS will drop by too much either. Recent technical indicators for CVS have been bullish and steady, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $30 range. CVS hasn't been below $30 since November and has shown support around $35 recently. This trade could be risky if the stock's upward momentum has been broken, but even if that happens, with the sector highly regarded, this could be seen as a buying opportunity. Plus CVS would have to break through many levels of support before this position would be in trouble.

Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in CVS.

MOST NOTEWORTHY: Today's more noteworthy initiations included International Game Technology (IGT), Big 5 Sporting Goods Corp (BGFV), CVS/Caremark Corp (CVS) and IHOP Corp (IHOP):

• Jefferies assumed coverage of International Game Tech (NYSE: IGT) with a Buy rating and $47 target citing an attractive risk/reward.

• Big 5 Sporting Goods (NASDAQ: BGFV) was started with a Sector Performer rating and $33 target at CIBC, expecting shares to be driven by an operating margin recover and improving cash flows.

• CVS/Caremark Corp (NYSE: CVS) was reinstated with an Overweight rating at Lehman Brothers and resumed with an Overweight rating at Morgan Stanley.

• JP Morgan believes the rough environment, growing competition and valuation warrants IHOP Corp (NYSE: IHP) to start with a Neutral rating.

OTHER INITIATIONS:

• B. Riley initiated shares of United Online, Inc (NASDAQ: UNTD) with a Buy rating and $18 target.

• Bear Stearns started T-3 Energy Services, Inc (NASDAQ: TTES) with an Outperform rating and $32 target.

• Morgan Stanley initiated shares of Vanda Pharmaceuticals Inc (NASDAQ: VNDA) with an Overweight rating and $29 target.

• American Technology initiated shares of Bankrate, Inc (NASDAQ: RATE) with a Buy rating and $48 target.

• Altus Pharmaceuticals Inc (NASDAQ: ALTU) was initiated with an Outperform rating and $20 fair value estimate at Leerink Swann.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: HealthSouth Corp (HLS) and CVS/Caremark Corp (CVS) were today's notable initiations:

• Cowen started HealthSouth (NYSE: HLS) an Neutral rating citing valuation.

• UBS resumed coverage of CVS/Caremark Corp (NASDAQ: CVS) with a Buy rating and $42 target, calling the company a "top pick."

OTHER INITIATIONS:

• Roth Capital initiated shares of Bakers Footwear Group, Inc (NASDAQ: BKRS) with a Hold rating and $11 target, taking a "wait and See approach" until sales can be maintained.

• JP Morgan initiated Ipsco Inc (NYSE: IPS) with an Overweight rating and USG Corp (NYSE: USG) with an Underweight rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required)

Walgreen Co. (NYSE:WAG) opened at $44.28. So far today the stock has hit a low of $44.24 and a high of $45.05. As of 1:00 this afternoon, WAG is trading at 44.10, down 0.04 (-0.1%), well off its morning highs.

After hitting a one year high of 51.60 in September, the stock dropped sharply and has since seen resistance around 47. Tensions over the deal between CVS (NYSE:CVS) and Caremark (NYSE:CMX) wreaked havoc on drug store stocks yesterday, including a big dip in WAG stock yesterday afternoon. Most of these stocks bounced back earlier today but are now sliding with the rest of the market, with the CVS/CMX vote scheduled for tomorrow. The technical indicators for WAG have been bearish and steady, while S&P gives the stock positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $37.50 range. WAG hasn't been below 39.50 at all in the past year, and has shown support around 40. This trade could be risky depending on how the CVS-CMX deal turns out, but the strong support for WAG around 40 could protect this position.

Brent Archer is an options analyst and writer at Investors Observer. (Free Subscription)

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

MOST NOTEWORTHY: Some of today's most notable upgrades include SanDisk Corp (SNDK), CVS Corp (CVS), Dow Jones & Co (DJ) and DaVita Inc (DVA):

• SanDisk Corp (NASDAQ: SNDK) was upgraded to Buy from Neutral at UBS with a $53 target, as they believe Apple's (AAPL) new 16GB & 32GB iPod Video products will be NAND flash based. The firm expects SanDisk shares to perform as Apple's products ramp.

• Deutsche Bank upgraded shares of CVS Corp (NYSE: CVS) to Buy from Hold with a $42 target as they believe the bidding process for Caremark Rx, Inc (NYSE: CMX) is over, reducing concerns.

• Prudential upgraded shares of Dow Jones & Co (NYSE: DJ) to Neutral from Underweight to reflect valuation and the company's strong 2007 outlook.

• Piper Jaffray upgraded DaVita Inc (NYSE: DVA) to Outperform from Market Perform with a $59 target on valuation.

OTHER UPGRADES:

• Citigroup upgraded Adolor Corp (NASDAQ: ADLR) to Hold from Sell with a $10 target to reflect GlaxoSmithKline's (NYSE: GSK) plans for an additional advanced study of Entereg.

• Wachovia upgraded shares of Symmetry Medical Inc (NYSE: SMA) based on analysis that shows inventory levels have fallen at large-cap orthopedics firms while capital expenditures have stabilized, competitors are more upbeat on market outlook, and checks that indicate the supplier market has stabilized.

• Foundry Networks, Inc (NASDAQ: FDRY) was upgraded to Buy from Neutral at Bank of America.

• JP Morgan upgraded Alaska Communications Systems Group (NASDAQ: ALSK) to Outperform from Neutral on valuation.

• Goldman Sachs upgraded PPG Industries (NYSE: PPG) to Buy from Neutral with an $82 target.

• Merrill Lynch upgraded shares of Expedia, Inc (NASDAQ: EXPE) to Buy from Neutral with a $27 target.

• Matrix USA upgraded AMR Corp (NYSE: AMR) to Hold from Sell on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Express Scripts Inc (NASDAQ: ESRX) upped its offer for Caremark RX Inc (NYSE: CMX) last night. Express, a pure pharmaceutical benefits management company, or PBM, is in a battle with CVS Corporation (NYSE: CVS), the pharmacy chain, over Caremark.

Express supposedly raised its offer over concerns that it will soon receive a second request from regulators. This would most likely mean the deal would not close for another six to nine months. CVS and Caremark have already received regulatory approval with the shareholder vote coming in a few weeks.

This is a bizarre transaction in that a PBM like Caremark has never merged with a pharmacy chain like a CVS. Shareholders believe Caremark management and board is acting in their own best interests rather than the interest of shareholders. Actually, there are few sell-side analysts or shareholders who know the industry well who actually see the business merits of the two companies merging.

Meanwhile, as this battle unfolds, it appears the fundamentals for this industry are improving. Medco and Express both reported very strong results and guided to strong results.

Express' management is very well-respected and most believe would do a very good job working with Caremark. The battle is set for the shareholders' meeting set in the next few weeks. We will see if Express increases their offer again prior to the shareholder meeting.

MOST NOTEWORTHY: The New York Times Co (NYT), Moody's Corp (MCO), Nokia Corp ADS (NOK) and Circuit City Stores (CC) were some of today's most notable downgrades:

• Lehman Brothers cut the New York Times Co (NYSE: NYT) to Underweight from Equal-Weight as they believe the company's recent cost cuts reflect management's concerns over its top-line.

• Moody's Corp (NYSE: MCO) was downgraded to Underperform from Neutral at Credit Suisse based on the potential to impact from a slowdown in collateralized debt obligation issuance on growth.

• Nokia Corp ADS (NYSE: NOK) was removed from Goldman Sachs's Conviction Buy List based on its recent strength.

• William Blair cut Circuit City Stores (NYSE: CC) to Underperform from Market Perform as the firm has concerns over the slowing of the advanced TV cycle and challenges to the company's turnaround plans.

OTHER DOWNGRADES:

• UBS lowered Cypress Semiconductor Corp's (NYSE: CY) rating to Neutral from Buy based on valuation.

• Citigroup cut BAE Systems plc ADR (OTC: BAESY) to Hold from Buy.

• Raymond James downgraded Caremark RX (NYSE: CMX) to Market Perform from Outperform.

• Matrix USA downgraded The Goodyear Tire & Rubber Co (NYSE: GT) to Hold from Buy and removed the company from its Focus List as they see little upside from its recent rally.

• Nollenberger downgraded shares of Station Casinos (NYSE: STN) to Neutral from Buy after the company accepted a revised buyout offer from Fertitta Colony Partners as they feel the chance for a higher offer to emerge is unlikely.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Monday February 19

• U.S. markets closed for President's Day holiday

Tuesday February 20

• Wal-Mart Stores (NYSE: WMT) to report Q4 earnings; conference call at 7:30am. Analysts will review Wal-Mart's same store sales, overall traffic, new products displayed, overall product mix, employee retention rates, sector position, and margins, along with Wal-Mart's overall global new store opening timetable, including store square footage expansion targets.
• Hewlett Packard Company (NYSE: HPQ) to report Q4 earnings; conference call at 5pm. Analysts will be focusing on HP's overall revenue, the performance of their various divisions, and any comnent's HP makes about the effect of the launch of Microsoft Corporation's (NASDAQ: MSFT) Vista on sales.
• Caremark Rx (NYSE: CMX) had scheduled a special shareholder meeting regarding the CVS Corporation (NYSE: CVS) merger today. It was postponed until at least March 9 by the Delaware Chancery Court to allow more time for dissemination of information.

Wednesday February 21

• Nokia Corporation (NYSE: NOK), Sprint Nextel Corporation (NYSE: S) and Qualcomm Inc (NASDAQ: QCOM) to hold press conference, according to PhoneNews.com, which speculated that the conference could be the end of patent disputes between Nokia and Qualcomm, meaning Nokia may announce a return to CDMA handset distribution, with EV-DO chipsets.

Thursday February 22

• BEA Systems Inc (NASDAQ: BEAS) to report Q4 earnings; conference call at 5pm. Note that BEA Systems just concluded a stock options review that did not result in a breakup in management, which Pacific Crest Securities believes removes an overhang on the company.

Friday February 23

• CVS Corp had scheduled a shareholder meeting today, but it has been postponed in light of the Delaware Chancery Court's decision to enjoin the February 20, 2007 shareholder meeting of Caremark Rx.

MAJOR PAPERS:

• A full page advertisement by CVS Corporation (NYSE: CVS) in this morning's Wall Street Journal (subscription required) warned Caremark Rx Inc (NYSE: CMX) shareholders that their "[investments] would be at risk" under Express Scripts' (NASDAQ: ESRX) proposal and recommended the CVS/Caremark merger. Also in the Journal:
• Investors at Clear Channel Communications Inc (NYSE: CCU) believe they are being short changed and have started a showdown with private equity buyers.
• The NYSE Group Inc (NYSE: NYX) and the Tokyo Stock Exchange are expected to announce an alliance.
• US Airways Group (NYSE: LCC) may increase its offer for Delta Air Lines (OTC: DALRQ).
• The Financial Times (subscription required) featured articles on News Corporation (NYSE: NWS) and Corus Group ADS (NYSE: CGA).
• News Corp's MySpace is close to launching local versions in Canada and Mexico.
• Tata Steel is expected to top CSN's offer for Corus Group at a takeover auction on Tuesday.

OTHER PAPERS:

• USA Today wrote that two years ago, Verizon Communications' (NYSE: VZ) Verizon Wireless turned down the opportunity to be the exclusive distributor of the iPhone in the U.S. because of Apple Inc's (NASDAQ: AAPL) financial terms and other demands.
• Investor's Business Daily's "New America" column mentioned Universal Stainless & Alloy Products (NASDAQ: USAP) positively, writing that Universal is looking to expand abraod with little foreign competition. The specialty steel products company focuses on the aerospace and power industries and named Boeing Company (NYSE: BA) as a key customer.

CVS Corp. (NYSE:CVS), which purchased half of the Eckerd Drug chain just a few years ago, announced at the beginning of the month that it is going to buy Caremark Rx, Inc. (NYSE:CMX) for a reported $21 billion. This would create a whopping $75 billion combined-revenue company that is poised to compete in both the retail drug business and in the health/pharmacy benefits business, as the latter is Caremark's main forte.

Might regulators have a problem with the nation's largest pharmacy owning a pharmacy benefits company? Sure, there could be huge conflicts of interest here, but if AT&T Inc. (NYSE:T) and Bellsouth Corp. (NYSE:BLS) are cleared to merge, then anything is possible these days in the regulatory arena.

In the deal, CVS shareholders will own most of the combined company, as each Caremark share would be exchanged for 1.67 shares of CVS. The combined company would be called CVS/Caremark and have its headquarters in Rhode Island, where CVS is currently based. Both shares of CVS and Caremark were down on the merger's announcement, as investors seemed a tad bit skittish over the whole deal. Are you?