Investing

Walgreens (NASDAQ: WBA) Stock Dividend Cuts Are Coming

Austin Smith

Published: August 20, 2024 7:30 am

Last Updated: August 20, 2024 4:16 pm

Key Points:

• Walgreens faces challenges after overexpanding, including buying Boots in Europe.
• They cut their dividend and may need to do so again unless they sell assets.
• Walgreens is laying off staff and closing 2,000 stores.
• Also: where Walgreens is fumbling, these 2 Dividend Aristocrats continue to make investors rich. Unlock the list of both stocks today. 

Douglas and Lee discuss companies that people “love to hate,” with Walgreens (NASDAQ: WBA) being the focus of their conversation. They highlight how Walgreens overextended itself by placing stores on nearly every corner and making a significant acquisition of Boots, the largest pharmacy in Europe. This expansion has led to financial strain, including the cutting of their once reliable dividend, which had been consistently raised for 25 years. With the stock price struggling, there’s concern that Walgreens may need to cut the dividend again unless they can sell Boots or divest from other ventures. Additionally, Walgreens is laying off employees and closing 2,000 stores, signaling deeper issues within the company.

Transcript:

Companies we hate or companies we love to hate.

We’re starting to hate.

Yeah.

Who’s your candidate? Love to hate companies.

And it’s funny, I’ve been somewhat of a poster boy for this.

So I guess it’s somewhat owed me a couple, but I think we got to be very careful about Walgreens because Walgreens…

They had the Bank of America problem.

You can’t put a store on every corner.

And then they made a huge, huge purchase of Boots, which is the biggest pharmacy in Europe.

And they got overextended.

They cut their dividend back, and they were a dividend aristocrat.

You know, they’d ripped, you know, lifted that dividend every year for 25 years, they had to slash their dividend…

Which is still now because the stock has been hit so hard, it’s still high again.

And I’m starting to think, I’m starting to think they’re going to have to cut that dividend again, unless they can sell Boots, which would be $9 billion.

And they, and get rid of some of the other items they’ve gone into.

I’m not starting to like it, and they’re laying off people.

They’re shutting 2,000 of the Walgreens.