10 Biggest Dividend Cuts and Suspensions of 2024

5. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)

Number of Hedge Fund Holders: 33

Walgreens Boots Alliance, Inc. (NASDAQ:WBA) ranks fifth on our list of companies with recent dividend cuts. The Illinois-based multinational holding company owns retail pharmacy chains and various pharmaceutical manufacturing and distribution companies. It has faced challenges since the start of the year. The company took a major hit when it cut its dividend by 50%, ending nearly 50 years of consistent increases. It has also struggled with competition from online retailers and pressure from pharmacy benefit managers (PBMs). According to the company, the dividend reduction will help generate capital to invest in the growth of its pharmacy and healthcare businesses. Since the start of 2024, the stock has declined by over 64%.

Walgreens Boots Alliance, Inc. (NASDAQ:WBA), similar to other drugstores, has faced challenges due to a decline in COVID-19 vaccines and testing, reduced reimbursement for prescriptions, and pharmacy staffing shortages. However, the recent quarterly earnings are somehow encouraging. The company reported revenue of $37.55 billion in fiscal Q4 2024, which showed a 6% growth from the same period last year. The revenue also surpassed analysts’ estimates by $2 billion. The company expects its adjusted EPS for fiscal 2025 to range from $1.40 to $1.80, with growth in US Healthcare and International operations expected to more than offset a decline in US Retail Pharmacy. This projection also factors in a higher adjusted effective tax rate and lower contributions from sale-leaseback transactions and earnings from Cencora.

Walgreens Boots Alliance, Inc. (NASDAQ:WBA) also reported a strong cash position in Q4. The company generated $1.3 billion in operating cash flow and its free cash flow for the quarter came in at $1.1 billion. The free cash flow grew by $537 million from a year ago period. It currently pays a quarterly dividend of $0.25 per share with a solid dividend yield of 10.47%, as of December 22.

Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 33 funds owned stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA), compared with 35 in the previous quarter. These stakes are worth nearly $282 million in total.