Walgreens Boots Alliance: Down In An Up Year

Walgreens Boots Alliance (WBA) is a Dow Jones Industrial Average (DJI) component. But despite a good year for the index, Walgreens Boots had a down year. In fact, it has the worst return of all stocks in the index (as of December 21, 2019). Even worse the stock is trading far below its 52-week high of $74.94. The current stock price is ~$58.39. The stock is also trading below its all-time high set in late 2015. On the positive side, Walgreens Boots is a Dividend Aristocrat, having raised its dividend for 44 consecutive years. The current yield is ~3.1%, and the dividend is well-covered by earnings and free cash flow. Hence, the stock may interest some investors seeking income or dividend growth. But with that said, Walgreens’ is facing reimbursement challenges, litigation related to opioids, and company-wide margins have been declining for several years. It is not clear that Walgreens Boots’ attempts at improving operational efficiencies and cutting costs or driving retail pharmacy organic sales growth are taking hold. I believe the downside factors outweigh the upside factors, and thus, I am not a buyer of this stock.

Please read the complete article at my profile in Seeking Alpha.

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