Is a Dividend Cut Inevitable for Walgreens Boots Alliance Stock?
When a stock's dividend yield approaches 10%, investors know that there are some risks with owning it and that perhaps the dividend is at risk. If it were a no-brainer buy, investors would be buying up the stock and the yield would end up shrinking as the share price increases. But if it remains high or goes even higher, that's a sign that investors clearly don't see a reason to be bullish on the stock.
That's what's happening with Walgreens Boots Alliance (NASDAQ: WBA) stock these days. The company hasn't made any significant increases to the dividend but the yield is now at a monstrous 9.6%. Just a few years ago, it was hovering around 4%. In three years, the retail pharmacy chain's stock price has plummeted by 50%. The company's underwhelming results left investors worried about just how viable Walgreens is as an investment.
It also leads to the question of whether the dividend is safe, and whether investors should expect a cut to the payout. Let's take a closer look at just how sustainable the company's current dividend is.
Source Fool.com
