Attention dividend hunters! Walgreens Boots Alliance Inc (NASDAQ:WBA) will be distributing its dividend of $0.4 per share on the 12 June 2018, and will start trading ex-dividend in 3 days time on the 17 May 2018. Should you diversify into Walgreens Boots Alliance and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Walgreens Boots Alliance
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
Does Walgreens Boots Alliance pass our checks?
The current trailing twelve-month payout ratio for the stock is 39.33%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect WBA’s payout to fall to 23.58% of its earnings, which leads to a dividend yield of around 2.70%. However, EPS should increase to $5.23, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. WBA has increased its DPS from $0.38 to $1.6 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Walgreens Boots Alliance generates a yield of 2.50%, which is on the low-side for Consumer Retailing stocks.
With these dividend metrics in mind, I definitely rank Walgreens Boots Alliance as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three key aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for WBA’s future growth? Take a look at our free research report of analyst consensus for WBA’s outlook.
- Valuation: What is WBA worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether WBA is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.