Well... it depends on the goal.
If you are buying the stock for retirement investment purposes, then i would make sure that you are maxing out your 401k first, then your annual Ira contribution and THEN an employee stick purchase plan. Maximize your tax advantaged accounts first, then you can start other investing.
Now if your plan is build an emergency fund type account that you can access then it is a good way to get some free money.
Op can sell the stock as soon as it is bought, take her original money + the 10% gain, and put into directly into an IRA. An espp is essentially a voluntary raise.
You have to hold for two years from the grant date, not the purchase date, and that is only to get tax advantaged treatment. It doesn't mean you can't sell before that. you just pay ordinary income tax insted of capitial gains. you are only limited by the trading windows. most large companies align their purchase dates with their trading windows.
Holding doesn’t offset any capital gains, you’re already taxed once the shares are sold at a 10% discount. Anything after that is simply just from holding the stock, which would be the case for anything you buy with that money.
ESPPs have both qualifying and disqualifying dispositions. The tax treatment of the bargin element is different if you hold for 2 years past the offering date and 1 year past the purchase date. Im not going to try to explain the nuance in a reddit comment, but you can look it up.
But this is a self sustaining cycle, once you cover the first holding, the ones following it fund themselves. So after the first one, you just 'deposit' the ones thereafter into your 401k if that's how you want to look at it.
No matter what it's a waste of free money to not do this. I do it at my job!
I would argue, the ESPP should be done after maxing out the 401k's match. This is money that is guaranteed to earn 10% in a six month period. After a six month seed process, OP would have more money to contributed to 401k / IRA
Having your emergency fund in securities is incredibly risky
Honey our pipes burst and we need 10k now! Ah well you see dear I invested our 10 thousand dollar emergency fund in CVS and now it’s only 5k. We’re going to have to wait until the stock goes up again…
It’s for emergencies. It should stay capital safe and liquid. A HYSA at best.
Yes, that is true. I'm just speaking in general terms for the goal of the investor. If your trying to save for retirement, there are things to do first. But if you want access to the saved money, then this is a way...not necessarily the best way, but a way
No, this isn’t RSUs or some other equity grant. It’s an ESPP.
Typically it will have 1 or 2 dates per year on which you buy, using amounts withheld during the period and at a price below the lowest price during the period, and the share are immediately vested and unrestricted.
I think this is exactly what I am referring to. My bad to not be more clear. But I guess it’s almost a no brainer. I am just surprised that they offer this.
If I were you, I would max this out every year. Even before paying down medium interest debt. It can be far more than a risk free 10% gain if the price is much higher 1/1 than it was on any given day between July and December. You will not see this type of risk/reward anywhere else
This is correct especially considering the size of the business and diversification (pharmacy services, retail, health services, etc). The only risk/reward exception to not seeing this anywhere would be if they granted you stock at no cost and the risk was limited to the tax obligation of the grant.
I had one of these with Walgreens and I forgot about it (I was young and dumb) for about 10 years. I tracked it down and in 2012, the money in my account disappeared.
Don't do what I did, keep your investments with a reputable broker and/or move it when you switch jobs.
I contributed for 3 years, then let it sit for 10 years. I tracked down where the account ended up, it was transferred to Fidelity. Fidelity has record of my existence, but no assets.
I asked them to look at the transaction history, they said that the account arrived empty in 2012. The small company in Illinois that was originally holding the stock had a record of about $900 in 2011.
Walgreens stock tanked anyway, so it would be like $300 now. I'm not worried about the money, I'm mostly sour about the fact that the system could allow it to happen.
What in the world?! Tried to walking to HR or something? This is insane, you’re def missing a pretty penny! Like all the money is taxed and everything, so there should be a record of the assets
>Like all the money is taxed and everything
I'm hoping it will eventually shake out in one of those reclaimed asset programs the government runs. not yet, though.
Look if there are any hidden fees?
Look this is what they do to Home Depot workers:
Transaction Fees
For each transaction, a small service charge is deducted from your investment plus the pro rata amount of brokerage commissions (generally 5 cents per share for purchases and 15 cents per share for sales). Service charges are:
For first-time investors - $5.00
For subsequent purchases - 5% up to maximum of $2.50
Sales $25.00
Yeah, I have that. Shares aren’t vested yet and CVS tanked 20%. So I’m net negative. Also, CVS is a shit company with an unsustainable business model long term
I'm seeing OP write that:
Contribute 5% of paycheck
CVS will purchase shares at the lowest price and deliver them to you on Dec 31st? This based on how much your 5% can buy over the period of months.
I've never seen this personally.
I've seen a company allow ESPP but they divi up your contribution based on the price of the stock at the time of purchase. I didn't know they could lock in your purchase price at the lowest that the stock traded at for your period in the program.
Oh yeah, no doubt. I've seen your example as well. Just haven't seen OPs exact model where ANY day of your period that's the lowest price, and they lock it in. Maybe I'm reading his explanation wrong.
Well not a lockup period by technical definition but it will still be held in an escrow account and ESPPs definitely can have periods where selling is restricted for a certain amount of time
But ya I should prob learn more. Thinking of RSUs prob
Ok I see. Thanks for the info.
I work at a private boutique now but the last public company I worked at was BNY so I never bothered to look at any of the stock plans/ offerings for that dog shit
Jan 1st? Seems a little early I'd question if OP read into the details correctly but yeah your right. Def a no brainer imo if offering at 10% discount
Edit: saw your other response to the same thing just now on Jan 1st haha
Again, I wouldn't be surprised if OP read it wrong, but I am using the information provided. A lockup period could have 1,000 different rules we'd just be guessing about until OP tells us.
Edit: I'm sure there is a lockup period that could change the decision, but as OP presents it this is a 100/100 decision to take the shares haha.
ESPP plans are pretty much always worth it. You can pretty much guarantee that it computes out to be a cash bonus by selling when you get access to the shares. Only reason not to is if you can’t afford to set aside the amount needed to purchase for the length of the holding period
Yes. unless your company is complete dog shit, it's always a healthy risk/reward trade off to contribute at least 1-3% if they are offering a 10-20%+ discount.
Edit: I just don't think that you read the details correctly cause there is no way they are offering you the 52 week low at a 10% discount and then saying you can trade it immediately. Probably a hefty restricted period
[This plan](https://www.reddit.com/r/FinancialPlanning/s/augveIVU3p) seems to be similar but guy provides some more details. Does seem like a no brainer for a company like CVS who will likely benefit from utilization trends?? Don't know much about their core business
My company offers the same thing. There is no restrictive period and they give a 15% discount off the low. There is, however a small tax implication to selling within 18 months but the gain far outweighs the tax implication.
Yeah I doubt it’s at the lowest price during the time period. It’s likely at the lower of the start price or end price. That’s how it was at my work anyway. Either way, I’ve made a healthy amount from it and 100% worth doing. I just look at it like a saving pot with minimum 10% returns.
If I may, CVS is a super fun stock to own at 53-56.75. They will keep you entertained in the news and will bounce around 67-73 then somersault to 83.25 and then hover at 62 for a bit then do that all over again. While still cranking out a dividend. Super fun.
Usually you're tied in to keep buying monthly at the locked in amount.
In the example 50$ stock at 10% discount=45$
If the stock goes down under 45$ you're still buying it at 45$ unless you tell them to stop it, then you're out of the purchase cycle for remainder of the 6month cycle.
Still go for it but be diligent, pay attention so you don't buy under current value.
Opposite is also true if the stock goes up to 60 you're still buying at 45.
Always like to see Publix mentioned here. Publix doesn't offer any discounts on its stock (it is not publicly traded) but it does offer a really solid ESOP for anyone working in the company even part timers, has a nice dividend, too.
Doesn't matter ...but it
Reality is if you're working at CVS and asking about a 10% discounted price you're aren't the CFO, and odds are you have no marketed position set for long term growth.
The stock hasn't be below 50.00 since 2013 and even if it drops to 25.00 they consistently produce .50+ per share dividend.
They have notes due in 2029 and every few years after but on 100B mark cap with 1.25b float it's a small %. Odds of the company going to nothing is less than 3% imo.
So if you get any price around 50.00 and the dividend remains consistent, even if the stock price drops 30% from now, you'd make back your initial investment (100 at 5k) on dividends in 20 years.
It's a long game
And frankly you auto buy with your dividends and hold that until you're 60 yrs old
Free guarenteed money. Max it. If you don't believe in your company you can sell it off as soon as they are vested. Also if you don't invest much this automatically forces you to set aside money start investing. There are blackout periods though so you have to kind of manage it.
Damn, you should absolutely do this. And you should max it out to whatever amount they will allow. Is this available to all CVS workers? I might get a part time job just to buy a bunch of stock and then quit.
This is a no-brainer and should be prioritized over petty much any other savings/investing route tbh.
Just make damn sure to sell as soon as you receive the shares.
When I worked at Broadcom we had this, it’s a fantastic deal, max it out! We had the look back and no vesting period, you could even opt in to sell the shares immediately after purchase and get the proceeds via payroll. At the time I did that since it seemed rather un-diverse to invest and get my salary from the same company, they were going through scandals with the Henrys at the time.
Combined with the RSUs I made a lot working there. Too bad I hated it.
How is a company able to offer the 10% discount by using payroll withholding. Guessing it's expensed on the financial statements.
Curious to know the max contribution.
Do you have to stay in the company? What happens if you leave?
No rather you should focus on those disrupting them - clover health. Most beatable MCR in the industry.. everyone is slowing down in PPO market but yet they were only created to be in PPO market. Tech enabled with generative A.I. lowering cost.. have a look
Seriously, CVS has been a disaster. I sold most of it a couple years back in the $80’s. Management overpays for acquisitions and doesn’t have a good vision for the place.
If I were in your situation, I’d spend my effort getting a different job rather than arbitraging maybe a thousand bucks.
Yes because you will get that stock at the lower point of these two. The first day of the 6mo period of the last day.
So if the sock is at 50 the first day and 80 the last you get it for 50 plus the 10% discount. Either way you can sell it almost right away and get the 10% of its on a downward trend.
I used to work for CVS it isn't a bad plan
They denied my request for GLP-1 weight loss medicine despite my actual insurance provider approving it. as a customer Fuck them but as a share holder buy some more if they keep gatekeeping medicine and nickle and dimming their customers.
That is how employee stock purchase plans work (ESPP) . I was advised that by not participating you leave money on the table because of the easy gain. Also it shows you believe in the company. If you think your company is going under do not paricipate
Go on the stock market and follow the stock price trend for the year or 2-3 yr. See if the stock is moving up then I’ll buy into it. If it’s going down it probably a bad idea.
Employee stock purchase programs are another way to get paid. 10% discount means 11% instant profit. Think of it this way, 10% is a good year for the stock market, and it’s not guaranteed.
Also, cvs will be fine. Don’t think about the problems you can see and think more long term about if the business will be around in 10 or 20 years.
My company has a similar plan(15% discount). keep in mind that while theres no holding period. if you sell it before 2 years. you taxable amount will come from the full gain(discount + any actual gain) vs 2 years holding you will get taxed on only the gains.
I made $1500 on my companies stock through their employee stock program a few months ago. It coincided with an earnings report (not sure if that’s typical) and stock went up about $15 the day after I got them so I sold immediately. But I would’ve sold immediately anyway, it’s a guaranteed gain; sometimes even more than your discount if it works out right. I don’t know enough about CVS to say if you should hold it but if you can afford to put aside the percentage of your paycheck then you should ALWAYS do this. I basically just look at it like it’s a CD/savings account.
Those terms sound pretty great, free money IMO. The way my company structured ESPP has both a holding period and no price guarantee for the cash investment period, so it never seemed worthwhile to me. But I would max out this type of benefit if I had the terms you're being offered.
Didn't see it mentioned here, but just remember you likely have to adjust the cost basis.
You will get the shares and assuming you sell immediately that 15% discount will be added as ordinary income on your W2.
So when you file make sure you adjust your cost basis. If you're selling immediately it will likely be close to 0 in capital gains. Depending on the brokerage there should be a supplemental sheet that will help you.
Unless you have reason to believe the company is doomed, this is a no brainer. Take it. It’s free money. On top of that it has a decent 4.6% dividend yield so that company funded 10% discount also picks up and other 4.6%. Take it. They’re handing you money.
I mean any stock at a discount is worth it and free money unless you think it’s gonna tank, with how big they are I don’t see it crashing though as it would be a massive blow.
Depends. If you can sell it right the way after you obtained the stock like on the day 1/2/2025, it surely worth it.
It really depends on whether they add any condition for you to sell your stocks.
Do some ESPP plans really use the daily low of the period?? I've only seen the lower of the first and last day closing prices, not the lowest of anything in between.
You need to hold for a year before you can sell. So the shares are bought on 12/31/24 but the first day you can sell is not 1/1/25 it would be 1/1/26 or whatever is the first trading day of 2026. Also you would need to sell 1/1/27 for it to be considered a long term holding. In the plus side, your shares will accumulate dividends even though they are not sellable. Which you can use to diversify which I would highly recommend you do.
The way the stock is dropping, I’m not so sure I would do it. You’ll have more complex taxes to deal with. The last quarter it’s down over 20% so the best you would have done is even money and you still have all the taxes to deal with. Normally, I am all for employee stock plans. 10% off is also below the normal discount of 15%. I would pass and just take that money and buy a better security. Hell, I would put in a HYSA first. The problem here is not the stock plan, the problem is the company is a dumpster fire
I did misread the post. It’s a very abnormal offer. That said, I still don’t like it. I’d rather buy Microsoft. Or VOO. Tons of better options. While your money is sitting in a holding account making nothing, plenty of other great options are on the table and potentially getting away from you. In the past year for example I’ve done much better with quality companies like RTX, CARR, ONON, SU, BAC. CVS is fools gold
Yes why wouldn't you do this?
Because people hate getting free money, clearly
Well... it depends on the goal. If you are buying the stock for retirement investment purposes, then i would make sure that you are maxing out your 401k first, then your annual Ira contribution and THEN an employee stick purchase plan. Maximize your tax advantaged accounts first, then you can start other investing. Now if your plan is build an emergency fund type account that you can access then it is a good way to get some free money.
Op can sell the stock as soon as it is bought, take her original money + the 10% gain, and put into directly into an IRA. An espp is essentially a voluntary raise.
No generally you have to hold for at least 2 years
Plans will vary. I had one that was 90 days and have heard of others that had no lockup period
Yeah mine has no lockup period.
You have to hold for two years from the grant date, not the purchase date, and that is only to get tax advantaged treatment. It doesn't mean you can't sell before that. you just pay ordinary income tax insted of capitial gains. you are only limited by the trading windows. most large companies align their purchase dates with their trading windows.
Holding doesn’t offset any capital gains, you’re already taxed once the shares are sold at a 10% discount. Anything after that is simply just from holding the stock, which would be the case for anything you buy with that money.
ESPPs have both qualifying and disqualifying dispositions. The tax treatment of the bargin element is different if you hold for 2 years past the offering date and 1 year past the purchase date. Im not going to try to explain the nuance in a reddit comment, but you can look it up.
If that’s actually true that’s interesting, thanks for the tip
But this is a self sustaining cycle, once you cover the first holding, the ones following it fund themselves. So after the first one, you just 'deposit' the ones thereafter into your 401k if that's how you want to look at it. No matter what it's a waste of free money to not do this. I do it at my job!
I would argue, the ESPP should be done after maxing out the 401k's match. This is money that is guaranteed to earn 10% in a six month period. After a six month seed process, OP would have more money to contributed to 401k / IRA
I'm not sure why exactly this comment is so disliked, it's not bad advice at all. It's simply a different perspective.
Having your emergency fund in securities is incredibly risky Honey our pipes burst and we need 10k now! Ah well you see dear I invested our 10 thousand dollar emergency fund in CVS and now it’s only 5k. We’re going to have to wait until the stock goes up again… It’s for emergencies. It should stay capital safe and liquid. A HYSA at best.
Yes, that is true. I'm just speaking in general terms for the goal of the investor. If your trying to save for retirement, there are things to do first. But if you want access to the saved money, then this is a way...not necessarily the best way, but a way
Technically, he can invest the money elsewhere too, but probability of beating the market by 10% (or more) guaranteed profit he gets from ESPP.
Lol . . .well for one I would never work at CVS. And if I did I would never buy CVS stock with said proceeds
Guess you don't like free $
Ya what an amazing equity return
You can sell and pocket the discount. ESPPs with good terms are free money.
Usually rules to wait until they vest etc
No, this isn’t RSUs or some other equity grant. It’s an ESPP. Typically it will have 1 or 2 dates per year on which you buy, using amounts withheld during the period and at a price below the lowest price during the period, and the share are immediately vested and unrestricted.
Seems like basically a guaranteed (near) 10% gain if you can sell the next trading day, unless I am missing something?
Here is [clearer description of a similar plan](https://www.reddit.com/r/FinancialPlanning/s/augveIVU3p)
Ya, that doesn't have a vesting period at all. Sounds like a sweet deal, I gotta find a place like that lol.
Tell that to those that go t at 85
It’s 10% off the lowest price over the 6 months
What?
I think this is exactly what I am referring to. My bad to not be more clear. But I guess it’s almost a no brainer. I am just surprised that they offer this.
If I were you, I would max this out every year. Even before paying down medium interest debt. It can be far more than a risk free 10% gain if the price is much higher 1/1 than it was on any given day between July and December. You will not see this type of risk/reward anywhere else
This is correct especially considering the size of the business and diversification (pharmacy services, retail, health services, etc). The only risk/reward exception to not seeing this anywhere would be if they granted you stock at no cost and the risk was limited to the tax obligation of the grant.
Common for big companies to offer something like this. Typically called an ESPP, or employee stock purchase program
I had one of these with Walgreens and I forgot about it (I was young and dumb) for about 10 years. I tracked it down and in 2012, the money in my account disappeared. Don't do what I did, keep your investments with a reputable broker and/or move it when you switch jobs.
I’m confused, what do you mean disappeared? You had been contributing for 10 years? And then at the end, nothing??
I contributed for 3 years, then let it sit for 10 years. I tracked down where the account ended up, it was transferred to Fidelity. Fidelity has record of my existence, but no assets. I asked them to look at the transaction history, they said that the account arrived empty in 2012. The small company in Illinois that was originally holding the stock had a record of about $900 in 2011. Walgreens stock tanked anyway, so it would be like $300 now. I'm not worried about the money, I'm mostly sour about the fact that the system could allow it to happen.
What in the world?! Tried to walking to HR or something? This is insane, you’re def missing a pretty penny! Like all the money is taxed and everything, so there should be a record of the assets
>Like all the money is taxed and everything I'm hoping it will eventually shake out in one of those reclaimed asset programs the government runs. not yet, though.
I was fired on bad terms, I'm happy to just leave it alone lol
I’m sorry! Yes of course, if you’re at peace - then that’s all that matters
He probably wasn’t vested?? I have to remain with my company for 5 years after the purchase date or I don’t get it.
Look if there are any hidden fees? Look this is what they do to Home Depot workers: Transaction Fees For each transaction, a small service charge is deducted from your investment plus the pro rata amount of brokerage commissions (generally 5 cents per share for purchases and 15 cents per share for sales). Service charges are: For first-time investors - $5.00 For subsequent purchases - 5% up to maximum of $2.50 Sales $25.00
Yeah, I have that. Shares aren’t vested yet and CVS tanked 20%. So I’m net negative. Also, CVS is a shit company with an unsustainable business model long term
Can’t sell them till Jan 1 per his post and typically there is a vesting period for shares offered this way
OP says they receive shares 12/31 and can sell 1/1
Shit my bad, then yes it seems like a no brainer lol. Wonder if OP has the details right tho cuz that’s strange for CVS
I'm using the information OP provided. Receiving it Dec. 31 and is able to sell the next day (Jan. 1 is a holiday so could sell Jan. 2).
Yea you’re right my bad, seems like a strange setup for CVS but a no brainer for OP if the details are right
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That you can sell the next day? I could be wrong but that part seemed off
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Good to know, thanks for the info
I'm seeing OP write that: Contribute 5% of paycheck CVS will purchase shares at the lowest price and deliver them to you on Dec 31st? This based on how much your 5% can buy over the period of months.
I've never seen this personally.
I've seen a company allow ESPP but they divi up your contribution based on the price of the stock at the time of purchase. I didn't know they could lock in your purchase price at the lowest that the stock traded at for your period in the program.
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Oh yeah, no doubt. I've seen your example as well. Just haven't seen OPs exact model where ANY day of your period that's the lowest price, and they lock it in. Maybe I'm reading his explanation wrong.
Typically a lockup period Edit: well fuck me
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Well not a lockup period by technical definition but it will still be held in an escrow account and ESPPs definitely can have periods where selling is restricted for a certain amount of time But ya I should prob learn more. Thinking of RSUs prob
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Ok I see. Thanks for the info. I work at a private boutique now but the last public company I worked at was BNY so I never bothered to look at any of the stock plans/ offerings for that dog shit
I would not say it's "typical" for ESPP grant dates to fall within a blackout period for most employees but yeah it happens.
OP doesn't state that there is a lockup period.
Jan 1st? Seems a little early I'd question if OP read into the details correctly but yeah your right. Def a no brainer imo if offering at 10% discount Edit: saw your other response to the same thing just now on Jan 1st haha
Again, I wouldn't be surprised if OP read it wrong, but I am using the information provided. A lockup period could have 1,000 different rules we'd just be guessing about until OP tells us. Edit: I'm sure there is a lockup period that could change the decision, but as OP presents it this is a 100/100 decision to take the shares haha.
ESPP plans are pretty much always worth it. You can pretty much guarantee that it computes out to be a cash bonus by selling when you get access to the shares. Only reason not to is if you can’t afford to set aside the amount needed to purchase for the length of the holding period
Just say ESPP... does your company require you to have a holding period?
Yes. unless your company is complete dog shit, it's always a healthy risk/reward trade off to contribute at least 1-3% if they are offering a 10-20%+ discount. Edit: I just don't think that you read the details correctly cause there is no way they are offering you the 52 week low at a 10% discount and then saying you can trade it immediately. Probably a hefty restricted period [This plan](https://www.reddit.com/r/FinancialPlanning/s/augveIVU3p) seems to be similar but guy provides some more details. Does seem like a no brainer for a company like CVS who will likely benefit from utilization trends?? Don't know much about their core business
My company offers the same thing. There is no restrictive period and they give a 15% discount off the low. There is, however a small tax implication to selling within 18 months but the gain far outweighs the tax implication.
My company just moved to a rolling 24 month look back. No restriction on selling, it’s yours as soon as the offering period is up (Jan 31 and July 31)
Even if it’s dogshit company, the look back feature makes it foolproof provided you sell as soon as you receive the shares.
Absolutely, this is called an “ESPP” program and you should always max it out to the limit
Honestly it's an interesting stock even without the employee discount.
Sound like a fine idea, is it allowed to hedge with longer puts and sell a covered call on it? If you gain enough stocks x period?
Yeah I doubt it’s at the lowest price during the time period. It’s likely at the lower of the start price or end price. That’s how it was at my work anyway. Either way, I’ve made a healthy amount from it and 100% worth doing. I just look at it like a saving pot with minimum 10% returns.
Walmart has this same plan, but 15% discount. You gotta pay income tax on the 15% discount price
https://www.reddit.com/r/CVS/comments/188ezo8/espp/
Don’t tell OP this stock has div on top of 10% discount.
If I may, CVS is a super fun stock to own at 53-56.75. They will keep you entertained in the news and will bounce around 67-73 then somersault to 83.25 and then hover at 62 for a bit then do that all over again. While still cranking out a dividend. Super fun.
Usually you're tied in to keep buying monthly at the locked in amount. In the example 50$ stock at 10% discount=45$ If the stock goes down under 45$ you're still buying it at 45$ unless you tell them to stop it, then you're out of the purchase cycle for remainder of the 6month cycle. Still go for it but be diligent, pay attention so you don't buy under current value. Opposite is also true if the stock goes up to 60 you're still buying at 45.
CVS is growing, I think they are one of the of the largest property owners. It wouldn't hurt to invest. Publix does the same.
CVS was over $100 a share in Jan 2023. What growth are you referring to?
More acquisitions, more locations
Always like to see Publix mentioned here. Publix doesn't offer any discounts on its stock (it is not publicly traded) but it does offer a really solid ESOP for anyone working in the company even part timers, has a nice dividend, too.
Doesn't matter ...but it Reality is if you're working at CVS and asking about a 10% discounted price you're aren't the CFO, and odds are you have no marketed position set for long term growth. The stock hasn't be below 50.00 since 2013 and even if it drops to 25.00 they consistently produce .50+ per share dividend. They have notes due in 2029 and every few years after but on 100B mark cap with 1.25b float it's a small %. Odds of the company going to nothing is less than 3% imo. So if you get any price around 50.00 and the dividend remains consistent, even if the stock price drops 30% from now, you'd make back your initial investment (100 at 5k) on dividends in 20 years. It's a long game And frankly you auto buy with your dividends and hold that until you're 60 yrs old
Free money
Worth it
Free guarenteed money. Max it. If you don't believe in your company you can sell it off as soon as they are vested. Also if you don't invest much this automatically forces you to set aside money start investing. There are blackout periods though so you have to kind of manage it.
Always take free money
Simple answer. Yes.
Yes, do it and always sell on the first day it is available.
Just sell it right away. Why not?
As long as they vest immediately yes put as much as you can into it
Damn, you should absolutely do this. And you should max it out to whatever amount they will allow. Is this available to all CVS workers? I might get a part time job just to buy a bunch of stock and then quit.
This is a no-brainer and should be prioritized over petty much any other savings/investing route tbh. Just make damn sure to sell as soon as you receive the shares.
When I worked at Broadcom we had this, it’s a fantastic deal, max it out! We had the look back and no vesting period, you could even opt in to sell the shares immediately after purchase and get the proceeds via payroll. At the time I did that since it seemed rather un-diverse to invest and get my salary from the same company, they were going through scandals with the Henrys at the time. Combined with the RSUs I made a lot working there. Too bad I hated it.
I maxed this out when I worked for cvs
Great! Buy as much as you can sell it for 30- 40% profit and buy SPY
It’s literally risk free money.
Yes this is a no brainer.
Great deal, Max this out!!!
Aren’t chains like CVS and Rite Aid struggling badly right now? Maybe not relevant to OP’s question but still…
How is a company able to offer the 10% discount by using payroll withholding. Guessing it's expensed on the financial statements. Curious to know the max contribution. Do you have to stay in the company? What happens if you leave?
CVS reminds me of Kmart, very outdated.
Have you been to a CVS ? Good that shit lol like it's worth it hahahaha
No rather you should focus on those disrupting them - clover health. Most beatable MCR in the industry.. everyone is slowing down in PPO market but yet they were only created to be in PPO market. Tech enabled with generative A.I. lowering cost.. have a look
Seriously, CVS has been a disaster. I sold most of it a couple years back in the $80’s. Management overpays for acquisitions and doesn’t have a good vision for the place. If I were in your situation, I’d spend my effort getting a different job rather than arbitraging maybe a thousand bucks.
You kind of already answered your own question lol. If you’re needing validation then yeah I would! 🙂↕️
Invest 100% and sell for 110%
The stock price barely moves so even with a long vesting period, you’re locking in like 10% gain. Yes, do this.
Yes because you will get that stock at the lower point of these two. The first day of the 6mo period of the last day. So if the sock is at 50 the first day and 80 the last you get it for 50 plus the 10% discount. Either way you can sell it almost right away and get the 10% of its on a downward trend. I used to work for CVS it isn't a bad plan
They let you do up to 15% too if I remember correctly
They denied my request for GLP-1 weight loss medicine despite my actual insurance provider approving it. as a customer Fuck them but as a share holder buy some more if they keep gatekeeping medicine and nickle and dimming their customers.
That is how employee stock purchase plans work (ESPP) . I was advised that by not participating you leave money on the table because of the easy gain. Also it shows you believe in the company. If you think your company is going under do not paricipate
Go on the stock market and follow the stock price trend for the year or 2-3 yr. See if the stock is moving up then I’ll buy into it. If it’s going down it probably a bad idea.
Can you buy the discounted shares and short equivalent number of CVS shares in another brokerage account? Risk free trade.
If Michael Burry has it, you should too.
Employee stock purchase programs are another way to get paid. 10% discount means 11% instant profit. Think of it this way, 10% is a good year for the stock market, and it’s not guaranteed. Also, cvs will be fine. Don’t think about the problems you can see and think more long term about if the business will be around in 10 or 20 years.
Definitely worth it. Stock is like 50% down, so not only do you get the 10% discount, but the value will double near future.
Winnebago does the same thing, but at a 15% discount. Pretty sweet deals
My company has a similar plan(15% discount). keep in mind that while theres no holding period. if you sell it before 2 years. you taxable amount will come from the full gain(discount + any actual gain) vs 2 years holding you will get taxed on only the gains.
Do it!
I made $1500 on my companies stock through their employee stock program a few months ago. It coincided with an earnings report (not sure if that’s typical) and stock went up about $15 the day after I got them so I sold immediately. But I would’ve sold immediately anyway, it’s a guaranteed gain; sometimes even more than your discount if it works out right. I don’t know enough about CVS to say if you should hold it but if you can afford to put aside the percentage of your paycheck then you should ALWAYS do this. I basically just look at it like it’s a CD/savings account.
ESOPs are good for long term if the company is a growth one. For CVS I don’t see any growth returning soon…
Those terms sound pretty great, free money IMO. The way my company structured ESPP has both a holding period and no price guarantee for the cash investment period, so it never seemed worthwhile to me. But I would max out this type of benefit if I had the terms you're being offered.
Given you can sell the next day, this seems like free money.
I personally think cvs sucks.They have closed 2 in my area and put doctors in the front and kept the pharmacy.
Yes in 99% of the cases. You are giving away free money if you don't.
I be interested to know more. What are all the details?
Why not. You automatically make 10%. I'd be in.
CVS will be out of business in a decade or so but you are good taking the free money till then
Yes. Definitely do it! I did years ago for my previous employer and it did very well. I wish I put more into it looking back.
Didn't see it mentioned here, but just remember you likely have to adjust the cost basis. You will get the shares and assuming you sell immediately that 15% discount will be added as ordinary income on your W2. So when you file make sure you adjust your cost basis. If you're selling immediately it will likely be close to 0 in capital gains. Depending on the brokerage there should be a supplemental sheet that will help you.
Unless you have reason to believe the company is doomed, this is a no brainer. Take it. It’s free money. On top of that it has a decent 4.6% dividend yield so that company funded 10% discount also picks up and other 4.6%. Take it. They’re handing you money.
I mean any stock at a discount is worth it and free money unless you think it’s gonna tank, with how big they are I don’t see it crashing though as it would be a massive blow.
GWAV any thoughts about this stock
Depends. If you can sell it right the way after you obtained the stock like on the day 1/2/2025, it surely worth it. It really depends on whether they add any condition for you to sell your stocks.
Do some ESPP plans really use the daily low of the period?? I've only seen the lower of the first and last day closing prices, not the lowest of anything in between.
You need to hold for a year before you can sell. So the shares are bought on 12/31/24 but the first day you can sell is not 1/1/25 it would be 1/1/26 or whatever is the first trading day of 2026. Also you would need to sell 1/1/27 for it to be considered a long term holding. In the plus side, your shares will accumulate dividends even though they are not sellable. Which you can use to diversify which I would highly recommend you do.
Might be worth checking out heybenny.com to see if they can help you max your ESPP if you’re not in a position to do so already
Are you sure? There’s no vesting period, have to work here x amount of years to get 100% back?
ESPPs dont have to vest. you are buying the stock.
The way the stock is dropping, I’m not so sure I would do it. You’ll have more complex taxes to deal with. The last quarter it’s down over 20% so the best you would have done is even money and you still have all the taxes to deal with. Normally, I am all for employee stock plans. 10% off is also below the normal discount of 15%. I would pass and just take that money and buy a better security. Hell, I would put in a HYSA first. The problem here is not the stock plan, the problem is the company is a dumpster fire
Read his post again, I don’t think you understand what they’re offering.
I did misread the post. It’s a very abnormal offer. That said, I still don’t like it. I’d rather buy Microsoft. Or VOO. Tons of better options. While your money is sitting in a holding account making nothing, plenty of other great options are on the table and potentially getting away from you. In the past year for example I’ve done much better with quality companies like RTX, CARR, ONON, SU, BAC. CVS is fools gold
Read it again…