Dogs of the Dow is a stock-picking strategy that selects the highest dividend-paying Dow stocks. Here’s one stock that is no longer part of the Dow but fits the criteria and, hence, is a top buy now.
Why Walgreens stock is a buy now.
Walgreens-Boots Alliance (WBA) was removed from the Dow Jones Industrial Average in February 2024 and replaced by Amazon.
Walgreens stock pays a dividend of $1.1, and hence, at a cmp of 11.9, the stock is available at a dividend yield of 10%. Now, the saying goes, if the dividend yield for a stock exceeds 10%, it means the company is in big trouble.
Walgreens has been struggling for years with declining revenue growth and profitability. No wonder the stock price suffered. But last week, the company announced better-than-expected fiscal Q1 2025 results for the period ended November 2024. The revenue jumped 7.5% year over year to $39.5 billion, while adjusted EPS declined 29% to $0.51. But this was well ahead of the analyst consensus for adjusted EPS of $0.37 on revenue of $37.4 billion
The stock surged and broke out above 10.6 levels. The stock is now a turnaround buy both fundamentally and technically.
The Good news is that the stock offers a healthy dividend and is cheap at the current market price. The stock trades at a forward price-to-earnings ratio (P/E) of 7.7.
The Winners
Chart Source: Finviz.com
Please do your own due diligence before trading. Nothing here or in the newsletters constitutes financial advice. These are just my views based on my experience.
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