WBA - Is Walgreens Boots Alliance's Dividend Still Safe?
2024-04-07 05:35:00 ET
At the start of 2024, Walgreens Boots Alliance (NASDAQ: WBA) made a big move, announcing that it would be slashing its dividend by 48%. While it was bad news for income investors relying on the dividend, it was a decision that shouldn't have come as too big of a surprise given the company's lackluster earnings results and poor financials. But given the stock's struggles, Walgreens' dividend yield remains high at around 5%.
The company, however, recently posted another underwhelming quarter and further net losses. Is the lower dividend payment safe enough for income investors to feel comfortable owning Walgreens' stock, or could another cut be coming?
For the three-month period ending Feb. 29, the good news for investors was that Walgreens' sales of $37.1 billion grew by 6.3% year over year. The downside, however, was that the company's gross profit was actually lower than in the prior-year period. At the same time, its selling, general, and administrative expenses rose by nearly $1 billion to $7.9 billion, creating a more difficult hurdle for the company to hit breakeven.
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Is Walgreens Boots Alliance's Dividend Still Safe?