Current Report: Walgreens Boots Alliance (WBA)

Fredrik Arnold

Financial Analyst

Contributor's Links: Dividend Dogcatcher

Fredrik Arnold is my pen name. A fascination with capital preservation, fixed fractional trading, and trading systems keeps me blogging for dividenddogcatcher.com, talkmarkets.com, and seekingalpha.com. Most of my ...more

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Current Report: Walgreens Boots Alliance (WBA)

Date: Sunday, November 13, 2022 8:15 PM EDT

Walgreens Boots Alliance bears the ticker symbol WBA. This is my first report on WBA Inc for my Viking portfolio. However, I have selected it as a candidate for two of my previous seven Dog of the Week portfolios, most recently in September 2022.

Walgreens Boots Alliance is a leading retail pharmacy chain with about 13,000 stores in the U.S. and internationally.

Walgreens’ core strategy involves brick-and-mortar retail pharmacy locations in high-traffic areas, with nearly 80% of the U.S. population living within 5 miles of a store.

Currently, the company has a leading share of the domestic prescription drug market at about 20%. In 2021, the company sold a majority of its Alliance Healthcare wholesale business to AmerisourceBergen for $6.5 billion, doubling down on its core pharmacy efforts and ventures in strategic growth areas in primary care (VillageMD) and digital offerings.

The company also has equity stakes in AmerisourceBergen (29%) and Sinopharm Holding Guoda Drugstore (40%).

Walgreens Boots Alliance, Inc. was founded in 1901 and is based in Deerfield, Illinois.

Three key data points gauge

Walgreens:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

WBA Price

Walgreens’ price per share was $41.26 at Friday’s market close. However, in the past year, WBA’s share price fell by $8.28 or about 16.7%.

If Walgreens’ stock trades in the range of $28.00 to $48.00 this next year, its recent $41.26 share price might reach $42.50 by next year. My upside increase estimate of $1.24 is based the average annual price gain for Walgreens over the past thirty years

WBA Dividends

Walgreens’ most recently declared quarterly dividend of $0.48 per share equals $1.92 annually and casts a yield of 4.65%.

WBA Returns

Adding the $1.92 annual

WBA dividend to my one-year price upside estimate of $1.24 shows a $3.16 potential gross gain per share.

At Friday’s $41.26 closing price, a little over $1000 would buy 24 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.42 per share.

Subtract that maybe $0.42 brokerage cost from my estimated $3.16 gross gain per share results in a net gain of $2.74 X 24 shares = $65.76 for a 6.5% net gain including a 4.65% annual dividend yield.

In a year our $1K investment in shares of WBA would generate $46.50 in cash dividends. Of course, a single share of WBA stock at Friday's $41.26 price is over $5.00 less than the annual dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this a likely time to buy Walgreens Boots Alliance Inc shares based on their dividends for the coming year 2022-23. The current dividend from $1K invested is $5.24 greater than WBA’s single share price. Consider yourself alerted. Now might be time for Walgreens Boots Alliance Inc.

All of the estimates above are speculation based on the past history of Walgreens Boots Alliance Inc. Only time and money invested in this stock will determine its market value.

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