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Stock AnalysisTicker: $WBA
Stock Price: $35.75
Sector: Healthcare | Pharmaceutical Retailers
Market Cap $31.3B
Fwd P/E 7.10
Trailing P/E 44.24
Dividend Per Share $1.87
Current Div Yield 5.26%
FCF Payout Ratio 37%
5-Year Dividend Growth 7%
P/B Ratio1.52
Debt/Eq .85
1/12
Walgreens is a dividend aristocrat on its way to becoming a dividend king with 44 years of consecutively raised dividends. 
2/12
2/12
Business Overview:
"Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and wellbeing company. It operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale."
3/12
"Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and wellbeing company. It operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale."
3/12
Summary
Walgreens boots alliance has recently been a hot topic of discussion as their stock price has hit on a rather vicious selloff.
4/12
Walgreens boots alliance has recently been a hot topic of discussion as their stock price has hit on a rather vicious selloff.
4/12
The company recently announced earnings on July 9 at the peak of COVID hysteria, and reported adjusted EPS down 43%!
Despite an extremely challenging quarter they still generated $660 Million of FCF which puts them at a 60% payout ratio.
A safe number IMO
5/12
Despite an extremely challenging quarter they still generated $660 Million of FCF which puts them at a 60% payout ratio.
A safe number IMO
5/12
Walgreens retail segments combine to account for 86% of their profits last year.
For reference $CVS retail accounts for only 53%.
6/12
For reference $CVS retail accounts for only 53%.
6/12
Given this extreme reliance on in-store sales and a surge to lower margin home deliveries, $WBA finds themselves on the wrong side of a changing trend in consumer behavior.
7/12
7/12
The company is making investments into digital and to help improve customer engagement (Opening doctors offices' in-store) however they are still struggling to get consumers into the stores.
8/12
8/12
These investments will take some time to play out, and it is hard to imagine any scenario in which these headwinds reverse. (Ecommerce, delivery)
9/12
9/12
$WBA does appear to be cheap by almost every metric. A FWD P/E of 7.5 and sector P/E of 20.7 looks extremely cheap. And a P/B ratio of 1.5 would make it appear that it cannot fall much lower.
10/12
10/12
One thing Walgreens does have working for them is that they are within 5 miles of 78% of the population. If they can adapt and give customers a reason to come back to the stores, they can continue to be a strong company for years to come.
11/12
11/12
At current valuations, $WBA would appear to be a buy in the short term. However, longer consumer trends would need to be considered if you wanted to make this a long term investment.
12/12
12/12
The above statements are not investment advice and only my opinions.
Please do further research if you choose to invest.
Please do further research if you choose to invest.
