Is Walgreens a Warren Buffett Stock?
Warren Buffett is a stickler for consistency, and it's no surprise why. Businesses that are capable of doing the same thing year after year while still posting decent growth regardless of whatever's happening in the market and in the world tend to be winners in the long run. And for Buffett, it's no big problem to wait out decades as his investments compound in value like clockwork.
Companies like Walgreens Boots Alliance (NASDAQ: WBA) seem like obvious candidates for investors like Buffett. As a pharmacy and retailer, there's little it needs to do differently to keep collecting money from the millions of people who rely on its stores. But the picture is a bit more complicated than that upon closer inspection, so let's dive in.
One of Buffett's biggest points of emphasis in investing is whether or not a business has an economic moat, and if it does, how wide. Wide moats tend to lead to robust and sturdy profit margins whether or not there are competitors in play. So they're a crucial aspect of a company's potential to make long-lived returns. In Walgreens' case, the moat consists of the locations of its retail stores, especially in high-value areas where commercial real estate may be sparse or too expensive for late-coming competitors to justify having a footprint.
Source Fool.com
