Decoding the Dividend Prospects of Walgreens Boots Alliance Inc
Walgreens Boots Alliance Inc (WBA, Financial) recently announced a dividend of $0.25 per share, payable on 2024-03-12, with the ex-dividend date set for 2024-02-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Walgreens Boots Alliance Inc's dividend performance and assess its sustainability.
What Does Walgreens Boots Alliance Inc Do?
Walgreens Boots Alliance is one of the largest retail pharmacy chains in the U.S., with over 8,500 locations. Nearly three quarters of Americans live within five miles of a Walgreens location. Roughly two thirds of revenue is generated from prescription drug sales; Walgreens makes up 20% of total prescription revenue in the U.S. Walgreens also generates sales from retail products (general wellness consumables and its own branded merchandise), European drug wholesale, and healthcare. With more locations incorporating additional services like Health Corner and Village Medical, Walgreens creates an omnichannel experience for patients and positions itself as a one-stop healthcare provider.
A Glimpse at Walgreens Boots Alliance Inc's Dividend History
Walgreens Boots Alliance Inc has maintained a consistent dividend payment record since 1976, with dividends distributed on a quarterly basis. The stock is also recognized as a dividend aristocrat, a prestigious designation for companies that have increased their dividend annually for at least 48 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Walgreens Boots Alliance Inc's Dividend Yield and Growth
As of today, Walgreens Boots Alliance Inc currently boasts a 12-month trailing dividend yield of 8.61% and a 12-month forward dividend yield of 4.46%, indicating an anticipated decrease in dividend payments over the next year. Over the past three years, the company's annual dividend growth rate was 1.40%, which increased to 3.00% per year over a five-year period, and a 10-year growth rate of 5.40%. This brings the 5-year yield on cost for Walgreens Boots Alliance Inc stock to approximately 9.98% as of today.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Walgreens Boots Alliance Inc's dividend payout ratio is currently 0.55 as of 2023-11-30, suggesting that a significant portion of earnings is retained for future growth and stability. Furthermore, the company's profitability rank of 7 out of 10, as of the same date, indicates good profitability prospects, with net profit reported in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Walgreens Boots Alliance Inc's growth rank of 7 out of 10 suggests a positive growth trajectory compared to competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, albeit with a growth rate that underperforms approximately 62.34% of global competitors. The 3-year EPS growth rate and 5-year EBITDA growth rate show some challenges, underperforming approximately 63% and 77.89% of global competitors, respectively.
Engaging Conclusion
Considering Walgreens Boots Alliance Inc's long-standing history of dividend payments, its status as a dividend aristocrat, and its current payout ratio, the company appears to be a compelling choice for investors seeking consistent income. However, while the dividend history is robust, the growth metrics present a mixed picture, with some areas showing underperformance compared to industry peers. These factors should be weighed carefully by investors when assessing the long-term sustainability of Walgreens Boots Alliance Inc's dividend payments. For those looking to explore further, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover more high-dividend yield investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
