Should You Invest in Walgreens for Its 5% Dividend Yield?
A high-yielding dividend stock can be attractive in today's bear market. With the stock market in the doldrums, a hefty but safe dividend yield can offset some of the potential loss in wealth appreciation -- plus, it can mean you're generating some recurring dividend income. At around 5%, Walgreens Boots Alliance (NASDAQ: WBA) pays a significantly high yield when you consider the S&P 500 average is less than 1.8%. The stock's 26% decline this year has pushed its yield higher, likely putting it on the radar of many potential income investors.
But is investing in Walgreens for the dividend a safe decision for investors, or would it be a move that could cause more harm than good?
One thing income investors need to be aware of with Walgreens is that the pharmacy retailer doesn't generate high margins. While there has been some volatility in the past few years due to the pandemic, over a 10-year period, the healthcare company has averaged a profit margin of just 3%.
Source Fool.com
