The coronavirus has hit this stock hard, but analysts see the company growing 12.6% next year. The shares have a current dividend yield of 4.66%, paid quarterly.
Walgreens Boots Alliance, Inc. (WBA)
From Sure Dividend
Walgreens stock has not performed as we’d hoped through the first half of 2020. The company’s stock has generated total returns of -23.6% from the beginning of 2020 through June 19th, versus -3.1% for the S&P 500 ETF (SPY).
Walgreens was outperforming The S&P 500 by mid-March. Since that time, The S&P 500 has gone on to reach a near full recovery off of COVID-19 price decline lows, while Walgreens stock has yet to recover.
The company’s stock now looks incredibly undervalued. Walgreen’s dividend yield is above 4%. For comparison, prior to recent events, the only time Walgreens stock had a yield above 3% since the mid 1980’s, was a brief stretch in 2012.
And the company continues to perform reasonably well, given the circumstances. Sales grew 3.1% and adjusted earnings-per-share declined 7.2% in the company’s Q2 2020 for the 3 month period ending 2/29/20.
Walgreen’s stock is trading for a price-to-earnings ratio of ~8 using our expected fiscal 2020 adjusted earnings-per-share estimate of $5.50. This is far too low for a high quality Dividend Aristocrat with 44 consecutive years of dividend growth.
Disclosure: I am long WBA.
Ben Reynolds, Sure Dividend Newsletter, suredividend.com, support@suredividend.com, 800-531-0465, June 21, 2020