Walgreens Boots Alliance Inc. has suspended its dividend, ending a run of quarterly shareholder payouts that spanned over 90 years. The company cited the need to strengthen its balance sheet and improve free cash flow as reasons for the decision, amid challenges including thin prescription reimbursement, rising costs, and inflation-sensitive consumers. Walgreens is also facing litigation over its role in the opioid crisis.
Shares of Walgreens dove early Friday, a day after the drugstore chain said it was suspending its dividend, breaking a streak of quarterly shareholder payouts that stretches back more than 90 yearsThis Feb. 9, 2024 photo shows a Walgreens in Bradenton, Fla. Shares of Walgreens dove early Friday, a day after the drugstore chain said it was suspending its dividend, breaking a streak of quarterly shareholder payouts that stretches back more than 90 years.
Chief Financial Officer Manmohan Mahajan told analysts earlier this month that Walgreens still was evaluating “the appropriateness and size of our dividend as part of our capital allocation policy.” There were only two dividend suspensions last year in the S&P 500, including one from the chipmaker Intel. There generally are only a few each year.
But he added that markets frequently see a dividend suspension as a positive sign initially because the company recognizes it has a problem and is taking a step to correct it.
Walgreens Dividend Suspension Balance Sheet Cash Flow Opioid Crisis Litigation
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