Walgreens Boots Alliance Hits Over 11% Yield: A Look at Dividends
Importance of Dividends in Stock Performance
Looking at the universe of stocks we cover at Dividend Channel, Monday’s trading revealed that shares of Walgreens Boots Alliance Inc (Symbol: WBA) yielded over 11% based on its quarterly dividend (annualized to $1), with stock prices hitting a low of $9.00 that day. Dividends play a crucial role for investors, as they have historically contributed significantly to total stock market returns.
To illustrate this point, consider someone who bought shares of the S&P 500 ETF (SPY) on December 31, 1999, paying $146.88 per share. By December 31, 2012, each share was worth $142.41, a decline of $4.67 over the years. However, during that same period, an investor would have received $25.98 in dividends per share, leading to a total positive return of 23.36%. Even factoring in reinvested dividends, this averages out to an annual return of about 1.6%. In contrast, a yield exceeding 11% certainly appears appealing if it is sustainable. As a member of the S&P 500, Walgreens Boots Alliance Inc stands out among large-cap companies in the index.
In general, dividends can be unpredictable and often fluctuate with a company’s profitability. Examining the dividend history of Walgreens Boots Alliance Inc may provide insight into whether the recent dividend is likely to continue, and thus whether an 11% annual yield is a reasonable expectation.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
