Portfolio Update
The FiveTwenty portfolio received $145.86 in dividends in the past week. BEN and LEG
| Past Week Dividend | $145.86 |
| Current Quarter Dividend (Q3 2022) | $145.86 |
| LifeTime Dividend | $4,753.02 |
| Estimated Annual Dividend | $5,732.64 |
The capital allocation for the week of 07/17/2022 to 07/23/2022 will be used to add to our position in Walgreens Boots Alliance (NASDAQ: WBA)
WBA – Position Update
Since our last check-in on WBA in week 14 of 2022, the company reported Q3 2022 earnings. In addition, the share price decreased 13.3% from $43.86 to $38.03.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 47 years | 46 years | |
| Yield | 5.18% | 4.33% | 2.34% |
| Payout Ratio | 35.37%1 | 32.65%2 | |
| P/E | 7.041 | 7.542 |
1 computed using TTM adjusted EPS of $5.40 as of Q3 2022
2 computed using TTM adjusted EPS of $5.82 as of Q2 2022
Q3 2022 earnings report
Did WBA’s latest earnings report raise any warning flags?
In Q2 2022, WBA saw a 4.2% decrease in sales over the same quarter a year ago. Retail sales growth in both the US and International segments as wells as from Walgreens Health acquisiotions were more than offset by the decline in the AllianceRx Walgreens business. The quarter also lapped prior year peak COVID-19 vaccinations. Overall, revenues dropped 4.2%, adjusted net income decreased 36.4%, and adjusted EPS were 36.4% lower.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q3 2021 | $34,030 | $1,313 | $1.51 |
| Q3 2022 | $32,597 | $834 | $0.96 |
| % Change | (4.2)% | (36.4)% | (36.4)% |
Additional noteworthy developments during the quarter:
- On 07/13/2022, WBA declared a quarterly dividend of $0.48 per share, an increase of 0.5%, payable 09/09/2022 to shareholders of record as of 08/19/2022.
- The company completed the strategic review of the Boots business and decided to keep the business.
Thesis
Why are we adding to our position in WBA?
For the first 9mo of 2022, WBA grew sales from continuing operations by 2%, while at the same time the share price has plunged more than 25%. The business will have some though year-over-year comparisons due to the sharp decrease in COVID-19 vaccinations. However, we continue to believe in the long-term prospects of the business and therefore continue to add to our position at an attractive valuation.
Previous Articles
- 2022 Week 14: Walgreens Boots Alliance (NASDAQ: WBA)
- 2021 Week 39: Walgreens Boots Alliance (NASDAQ: WBA)
- 2021 Week 7: Walgreens Boots Alliance (NASDAQ: WBA)
Additional Research
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