Buy This Stock BEFORE It Goes on Sale | Summary and Q&A

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December 6, 2023
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Let's Talk Money! with Joseph Hogue, CFA
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Buy This Stock BEFORE It Goes on Sale

TL;DR

Walgreens Boots Alliance (WBA) has struggled with declining revenue and rising costs, but recent news suggests a turnaround may be on the horizon, potentially leading to a 40% increase in stock price and preserving the 9% dividend yield.

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Questions & Answers

Q: What factors have contributed to Walgreens Boots Alliance's decline in stock value?

WBA has faced stagnant revenue growth, with sales plummeting and costs spiraling out of control. Market share loss to competitors like CVS has also impacted its performance.

Q: How has Walgreens managed to maintain its dividend increases despite its financial struggles?

Walgreens is recognized as a dividend Aristocrat, having raised its dividend for 48 consecutive years. The company pays a high dividend yield, attracting investors despite the decline in stock value.

Q: What recent news suggests a potential turnaround for Walgreens?

Walgreens has made significant changes, including selling shares in a drug wholesaler and offloading its pension liability. These actions, coupled with cost-cutting measures, could save the company billions and lead to a stronger future.

Q: How does the transfer of the boots pension liability impact Walgreens?

By transferring the pension liability to a UK Financial Services firm, Walgreens removes a significant debt burden, making the boots chain more appealing for potential buyers. This move could potentially result in a stock price increase.

Summary & Key Takeaways

  • WBA has experienced stagnant revenue growth and increased costs, leading to a decline in stock value.

  • Despite this, Walgreens has maintained its history of dividend increases for 48 consecutive years.

  • Recent developments, such as asset sales and the transfer of pension liability, could improve the company's financial position and potentially result in a significant stock price increase.

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