U.S. pharmacy chain Walgreens Boots Alliance (WBA) has cut its quarterly dividend payment to shareholders by nearly 50%.
Walgreens said that it is lowering its dividend payout to $0.25 U.S. per share from $0.48 U.S. previously, a reduction of 48%.
The company said the dividend cut is being made to help “strengthen its long-term balance sheet and cash position.”
Walgreens’ dividend yield is now 3.9% based on the company’s current share price.
That’s down from its previous yield of more than 7%, which made Walgreens the highest-paying dividend stock in the Dow Jones Industrial Average.
It also marks the company’s first dividend cut in nearly 50 years. Walgreens next dividend payment is scheduled for March 12 of this year.
The dividend cut was announced along with Walgreens latest earnings report, which showed the company beat Wall Street forecasts on both the top and bottom lines.
Walgreens announced earnings per share (EPS) of $0.66 U.S., which was better than the consensus expectation among analysts of $0.61 U.S.
Revenue in the quarter totaled $36.71 billion U.S., which topped forecasts of $34.86 billion U.S. Revenue was up 10% from the same period a year ago.
The latest earnings mark a turnaround for Walgreens, which previously missed earnings estimates for two consecutive quarters, the first time that had happened in nearly a decade.
Looking ahead, Walgreens reiterated its fiscal year 2024 adjusted earnings guidance of $3.20 U.S. to $3.50 U.S. per share.
The quarterly print was the first under new chief executive officer (CEO) Tim Wentworth, who took the helm of the company on Oct. 23 last year.
Shares of Walgreens have fallen 32% over the past 12 months as the company grappled with slowing demand for Covid-19 vaccines and tests.
The stock of Walgreens currently trades at $25.57 U.S. per share.
