Walgreens Boots Alliance (NASDAQ: WBA) released its first-quarter earnings last week, which continued to benefit from a boost in COVID-19 traffic. Sales totaled $33.9 billion for the period ending Nov. 30, 2021, which was an increase of 7.8% from the prior-year period when the pharmacy retailer reported a top line of $31.4 billion. That was also higher than the $32.74 billion that analysts were expecting from the healthcare business. And its adjusted earnings per share of $1.68 also beat estimates of $1.33.
Pharmacy same-store sales rose by 6.8%, being boosted by COVID-19 vaccines. And retail same-store sales were even more impressive, soaring by 10.6% and marking the company’s largest spike in decades.
Bullish on the performance, Walgreens also raised its forecast for the year, and it now projects that its adjusted earnings will grow in the low single digits.
At just under $54 to finish last week, the stock is trading within four dollars of its 52-week high of $57.05. Compared to rival CVS Health (NYSE: CVS), Walgreens remains the cheaper buy, trading at a forward price-to-earnings multiple of 11 versus nearly 13 for CVS. Another reason investors may want to pick up the stock instead of its rival — it pays a higher dividend. At 3.6%, investors can earn a higher yield with Walgreens than they can with CVS which pays just 2.1%. And the average S&P 500 stock pays even less at under 1.3%.
Walgreens looks to be a solid value and dividend stock to own today. And with COVID-19 boosters still being administered, another strong quarter could be in the cards in Q2.