Just over a week ago, I highlighted several stocks I thought
looked attractive based on their valuations and dividend yields relative to
their historical averages.
Of these names, Walgreens Boots Alliance (NASDAQ:WBA) was
trading the furthest below its 10-year average valuation. The stock also offers
a 4%+ dividend yield at the moment, which is nearly double the stock's average
yield since 2010. A year-to-date share price decline of 28% has aided in
realizing these figures.
Quarterly highlights
While I've already stated I am interested in the stock
because of its valuation and dividend, Walgreens' most recent quarter was
solid. Revenue grew 3.7% to $35.8 billion for the second quarter of fiscal
2020, beating analysts' estimates by $575 million. Excluding the impact of
currency translation, revenue was higher by 4.1%. Adjusted earnings per share
decreased 7.3% to $1.52, though this was 6 cents higher than Wall Street
analysts were looking for. Earnings declined mostly due to a challenging retail
market in the UK.
The Retail Pharmacy U.S. segment had sales growth of 3.8% to
$27.2 billion. Comparable same-store sales for locations opened at least one
year were higher by 2.7%. Pharmacy sales were up 5.3%, with comparable sales
growing 3.7%. The total number of prescriptions filled reached 296.8 million,
3.7% higher than the previous year. Even with this growth, prescription market
share decreased 50 basis points to 21%. Still, Walgreens' prescription market
share is second only to CVS Health Corporation (NYSE:CVS), which means the
company is still a dominant player in the U.S. market.
Retail Pharmacy U.S.'s retail business had a sales decline
of 0.3%, but, excluding tobacco sales, improved 1.9%. Overall, comparable sales
were up 0.6%. Strong demand in Health & Wellness due to cold, cough and flu
season aided results.
Comments
Post a Comment