Why Healthcare Could Be a Make-or-Break Strategy for Walgreens
Walgreens Boots Alliance (NASDAQ: WBA) has made for a disappointing investment to hold over the past five years. Down 41%, its performance is the complete opposite of that of rival pharmacy retailer CVS Health, which has delivered gains of more than 42% during that same time frame. While Walgreens does offer a high yield of 4.6%, that may be of little comfort to investors who have incurred such significant losses.
Whether the next five years will be any better for the stock will likely depend on the company's healthcare strategy. Walgreens looks to be going all-in on it, and that could lead to a significant recovery in the share price -- or to an even more disastrous decline that could even put the dividend in jeopardy.
Last year, Walgreens announced a $5.2 billion investment into VillageMD, which runs primary care practices. Together the companies plan to launch up to 1,000 co-located clinics (i.e., at the same location as a Walgreens store) by 2027. The company is off to a strong start and expects to have 200 co-located clinics by the end of this year.
Source Fool.com
