Walgreens Is Almost a Dividend King. Here's Why Investors Like You Shouldn't Care.
Dividend Kings sometimes become synonymous with being safe investments. And that's for good reason as they have stellar track records of increasing their Dividend payments for at least 50 consecutive years. It's an impressive achievement, which the vast majority of Dividend stocks are nowhere near.
One stock that is close to achieving that status is Walgreens Boots Alliance (NASDAQ: WBA). If its dividend increases over the next couple of years, the pharmacy retail giant could join the exclusive club of Dividend Kings. But while that sounds great, here's why investors shouldn't really care about this milestone.
A key reason growing companies don't pay dividends is because once you start making recurring payments, there's the expectation you will continue making them. A company may have a great year and think about paying back its shareholders via dividends. But then if it doesn't make the payment again in three months, it gives investors and analysts a reason to grow concerned about the business. After all, if it was doing well enough to pay dividends previously and not anymore, that might be a sign that it's doing worse.
Source Fool.com
