Despite recent setbacks, Walgreens has a positive long-term growth outlook
Walgreens Boots Alliance (NASDAQ:WBA) is a global
pharmacy-led health enterprise, and WBA stock is one of the best to buy for
2021.
Overall, Walgreens is a large and storied enterprise. It is
one of the two largest companies in its industry, the other being CVS Health
(NYSE:CVS). It was founded in 1901 and now has more than 21,000 stores in 11
countries. When you include equity investments, Walgreens has a presence in
more than 25 countries.
Additionally, WBA stock has a $34 billion market
capitalization and Walgreens generates $139.5 billion in annual revenue. And
the company has increased its dividend for 45 consecutive years, making it a
Dividend Aristocrat.
Walgreens Stock Is Undervalued:
Walgreens has a long history of success and a
shareholder-friendly corporate culture of dividend increases.
Despite this, the company is trading for a low price-earnings
(P/E) ratio of just 8.2 times expected fiscal 2021 adjusted earnings per share
(EPS) of $4.98.
For comparison, Walgreens has traded with an average P/E
ratio of around 15 over the last decade.
If Walgreens were to return to a P/E ratio of 15 over the
next year, the company’s stock would surge 83% without additional growth. Even
a return to a more reasonable yyy ratio of 12 would result in 46% returns.
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