In this article, we will analyze the list of some of the best dividend stocks with over 8% dividend yield.
High yields have always sparked debate between analysts and investors. Analysts typically advise caution with extremely high yields, while investors often find them attractive. Analysts’ concerns are valid; high yields can sometimes be warning signs of financial instability within a company. Many companies offering exceptionally high yields have been on the brink of cutting or suspending their dividends. That said, no company is completely out of the woods regarding its challenges, and dividend yield plays a minor role in a company’s financial difficulties. In fact, many reports have highlighted that high-yield stocks have performed well over the years.
Newton Investment Management published a report revealing that high-yield dividend stocks outperformed the broader market during high inflationary periods from 1940 to 2021. The report also showed that investment portfolios with high-yield dividend stocks outperformed those with low or no dividend stocks in terms of value-weighted performance. High-yield portfolios outpaced low-yield ones by 199 basis points and zero-yield portfolios by 330 basis points. This outcome is informative, yet it does not provide insights into the market conditions of that time, offering only a general overview of high-yield stock performance. Analysts have been particularly attentive to how dividend stocks perform during periods of market volatility, recognizing that the demand for regular income is most keenly felt during these times. Therefore, analysts recommend considering stocks with high yields only if these companies also demonstrate strong dividend growth streaks.
The S&P High Yield Dividend Aristocrat Index seeks to track the performance of companies with at least 20 consecutive years of dividend growth with an average dividend yield of 3%. According to a report by S&P Dow Jones Indices, in a backdrop of slowing growth but rising inflation, the index achieved a monthly average total return of 0.39% from 1999 through April 2024, surpassing the benchmark by approximately 120 basis points. Historically, inflationary environments have typically benefited short-duration stocks like Dividend Aristocrat companies. During slow growth phases with declining inflation, the performance of the High Yield Dividend Aristocrats has aligned closely with the benchmark. The report further mentioned that the dividend growth rate for the index also surpassed inflation over the long term.
As mentioned above, when investing in dividend stocks, high yield and dividend growth must go hand in hand, as many companies have shown that it is indeed possible. Analysts typically view yields between 3% to 7% as healthy. The health of dividend stocks is often assessed based on their ability to generate cash flow and their track record of dividend growth. Investors favor stocks that not only offer high yields but also maintain or steadily increase their dividend payouts, rather than frequently cutting them. Examples include some of the best dividend stocks such as Altria Group, Inc., Verizon Communications Inc., and British American Tobacco p.l.c. that have above-average dividend yields coupled with robust dividend growth histories. To read more about strong dividend payers, have a look at Best Blue Chip Dividend Stocks To Buy.
In this article, we will further take a look at some of the best dividend stocks with over 8% yield.
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Our Methodology:
For this list, we screened for dividend stocks with yields higher than 8% as of July 8. Then, we narrowed down the choices by finding stocks with an upside potential according to analyst predictions. Finally, we selected companies with the most hedge fund investors holding stakes in them, using Insider Monkey’s Q1 2024 database. The stocks are ranked in ascending order of hedge fund investors having stakes in them. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. NextEra Energy Partners, LP (NYSE:NEP)
Number of Hedge Fund Holders: 18
Dividend Yield as of July 8: 13.49%
NextEra Energy Partners, LP (NYSE:NEP) is an American master limited partnership (MLP) that mainly focuses on the acquisition of clean energy projects. Currently, the stock is in hot waters due to concerns over a potential dividend cut. Earlier, the company pointed to funding constraints caused by high interest rates and reduced its dividend growth goal by nearly half through 2026, setting it at 5% to 8% per year, with an annual target of 6%. The stock is down by over 13% since the start of 2024.
Though NextEra Energy Partners, LP (NYSE:NEP) has been offering generous dividends to shareholders over the years, the company’s business model is sensitive to high interest rates. Being an MLP, when concerns about interest rates or the economy arise and the stock price drops, the company loses the ability to issue new stock to fund growth. This can result in significant cuts to dividends. That said, the company profits by acquiring renewable energy assets from its parent company through drop-down transactions. Selling these clean energy assets allows the company to diversify its portfolio and pursue growth opportunities. This strategy enhances the company’s free cash flow, allowing it to provide positive forecasts for its distribution per unit in the future. In the first quarter of 2024, the company’s cash available for distribution came in at $164 million, up from $156 million in the same period last year.
While the future of NextEra Energy Partners, LP (NYSE:NEP)’s dividend remains uncertain, the company has consistently raised its payouts every quarter since 2015, which makes it one of the best dividend stocks with over 8% yield. The company pays a quarterly dividend of $0.8925 per share and has a dividend yield of 13.49%, as of July 8.
At the end of Q1 2024, 18 hedge funds tracked by Insider Monkey reported having stakes in NextEra Energy Partners, LP (NYSE:NEP), the same as in the previous quarter. These stakes have a consolidated value of over $148.7 million.
9. Medical Properties Trust, Inc. (NYSE:MPW)
Number of Hedge Fund Holders: 18
Dividend Yield as of July 8: 14.55%
Medical Properties Trust, Inc. (NYSE:MPW) is an Alabama-based real estate investment trust company that mainly invests in healthcare facilities. The company has expanded over the years and developed into one of the largest owners of hospital real estate globally. It faced significant challenges last year due to its tenant, Steward Health, filing for bankruptcy. In addition, after more than a decade of consistent dividend growth, the company was forced to cut its dividend last year. That said, the company has managed to overcome these challenges. In response to its tenant’s bankruptcy, the company approved $75 million in debtor-in-possession financing. It has not pledged any further funding beyond this amount. The company anticipates that Steward will use the financing to maintain patient care continuity while speeding up the process of transferring hospital operations to new operators.
Despite the challenges, analysts view the stock as an opportunity. The bankruptcy of its tenant, while a current issue, presents a potential upside. With Steward Health putting all its hospitals up for sale, a successful sale could lead Medical Properties Trust, Inc. (NYSE:MPW) to secure financially stable tenants, turning the situation into a hidden blessing. Street analysts have a consensus $4.88 price target on the stock, showing an upside potential of over 18%.
Funds from Operations (FFO) is the main metric for REITs because it provides a more accurate measure of the company’s operating performance than traditional net income. Despite experiencing losses, Medical Properties Trust, Inc. (NYSE:MPW) reported a positive FFO of $0.24 in the first quarter of 2024, which missed analysts’ estimates by $0.01. The company’s revenue for the quarter came in at $271.3 million, which showed a 22.5% drop from the same period last year. However, it has executed total liquidity transactions amounting to $1.6 billion year-to-date, achieving 80% of its initial target for FY24. In its earnings report, the company mentioned that it continues to implement a capital allocation strategy that is projected to surpass its initial target of $2 billion in liquidity transactions for 2024.
On May 30, Medical Properties Trust, Inc. (NYSE:MPW) declared a quarterly dividend of $0.15 per share, which was in line with its previous dividend. The stock’s dividend yield on July 8 came in at 14.55%.
As of the close of Q1 2024, 18 hedge funds in Insider Monkey’s database held stakes in Medical Properties Trust, Inc. (NYSE:MPW), worth collectively nearly $81 million. With more than 4 million shares, Silver Point Capital was the company’s leading stakeholder in Q1.
8. Nordic American Tankers Limited (NYSE:NAT)
Number of Hedge Fund Holders: 18
Dividend Yield as of July 8: 11.36%
Nordic American Tankers Limited (NYSE:NAT) is a Bermuda-based international tanker company that owns and operates Suezmax tankers. Since the start of 2024, the stock has declined by over 12% because of the escalated geopolitical tensions across the Red Sea. The company boasts one of the largest fleets of Suezmax tankers, which are reportedly in high demand due to the ongoing disruptions. Its business model positions it for long-term benefits. The company is expected to gain from the historically low supply of Suezmax tankers over the next two to three years. Environmental regulations, rising steel and production costs, and higher interest rates make investing in new ships difficult. According to the company’s recent earnings report, only six new vessels are expected to join the global Suezmax fleet in 2024. In addition, the rise in US exports and Chinese imports is boosting demand for transportation services.
Despite having a strong business model, Nordic American Tankers Limited (NYSE:NAT) is not immune to ongoing global challenges. Fluctuating oil prices, geopolitical tensions, and high operating costs, which are around $9,000 per ship daily, could weigh heavily on the company. That said, it remains confident in the strong demand for its vessels. The supply-demand dynamics in the market for the company’s fleet are currently favorable, supporting this positive outlook. Additionally, the company maintains one of the lowest debt levels among publicly traded tanker companies. As of March 31, 2024, the company’s net debt—which is calculated by subtracting current assets from total liabilities—was $228 million. With a fleet of 20 vessels, this translates to $11.4 million of debt per ship. It also has a lower debt-to-equity ratio of 0.5. Wall Street analysts have a Moderate Buy rating on the stock with a $5.40 price target, reflecting a 43.2% upside potential.
Nordic American Tankers Limited (NYSE:NAT) pays special attention to strategic timing and financing of expansions, which are crucial factors for ensuring both financial stability and commitment to dividend payments. The company has been paying regular dividend payments for 107 consecutive quarters, which makes NAT one of the best dividend stocks on our list. It currently offers a quarterly dividend of $0.12 per share and has a dividend yield of 11.36%, as of July 8. The company expects to increase its payouts in improved market conditions. Its cash position is also strong, generating over $37.5 million in operating cash flow in the first quarter of 2024.
Nordic American Tankers Limited (NYSE:NAT) was a part of 18 hedge fund portfolios at the end of Q1 2024, up from 16 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $20.2 million. Among these funds, Two Sigma Advisors owned the largest position in the company.
7. British American Tobacco p.l.c. (NYSE:BTI)
Number of Hedge Fund Holders: 19
Dividend Yield as of July 8: 11.6%
British American Tobacco p.l.c. (NYSE:BTI) is a multinational manufacturer of cigarettes, tobacco, and other nicotine products. The stability of the nicotine market provides a significant advantage to the company, particularly during periods of market downturns. In 2022, for example, when the overall market experienced declines, BAT achieved a 20% return for the year. Despite declining smoking rates in the US, the shift toward vaping has helped to stabilize the tobacco industry. The using of vaping among US adults grew by almost 40% between 2019 and 2023, according to a report by YouGov. These companies also benefit from significant profit margins and require minimal capital expenditures. In addition, they are spared from heavy research and development expenses, enabling them to distribute a solid portion of their earnings to investors.
In response to declining smoking rates in the US, British American Tobacco p.l.c. (NYSE:BTI) has diversified its product portfolio by introducing new offerings. Its New Categories segment, which includes alternative tobacco and nicotine products beyond traditional cigarettes, achieved profitability in 2023. This segment represents the company’s strategy to adapt to changing consumer preferences and regulatory landscapes by offering innovative and potentially less harmful alternatives to smoking. In 2023, the New Categories segment achieved ongoing revenue growth driven by volume, along with increased profitability, particularly led by Vuse and Velo. Consequently, the segment has achieved profitability two years ahead of its initial target. Street analysts have maintained a consensus Buy rating on BTI with a $34 price target, showing an upside potential of 7.70%.
British American Tobacco p.l.c. (NYSE:BTI) has a strong cash flow situation, which is important from a dividend point of view. In 2023, the company’s operating cash flow came in at £10.7 billion ($13.53 billion) while its free cash flow before dividend payments sat at £8.3 billion ($10.49 billion). The company also remained committed to its shareholder obligation, returning more than £5 billion ($6.32 billion) to investors through dividends in 2023. Its cash flow outlook is also positive, which promises consistent dividend payments in the future. The company expects to generate £40 billion ($50.57 billion) in free cash flow before dividends over the next five years.
Moon Capital Management, LLC also highlighted British American Tobacco p.l.c. (NYSE:BTI) strong cash position in its Q1 2024 investor letter. Here is what the firm has to say:
“We recently acquired shares in British American Tobacco p.l.c. (NYSE:BTI). It’s certainly no secret that the tobacco industry faces significant regulatory challenges, particularly in the U.S. combustibles sector. (Combustibles are traditional cigarette products that, when lit, the combination of the tobacco (fuel) and oxygen in the air produces a self-sustaining combustion process that consumes the tobacco. This contrasts with various heat-not-burn products, including e-cigarettes.) Despite these headwinds, however, BTI has organically grown its revenue by more than 4% annually over the last five years. The company’s operating profit has also risen more than 5% per year, even as the company has distributed massive dividends. (The company currently pays a dividend yield of 10%.)
BTI’s current free cash flow yield exceeds 16% – a figure that climbs even higher when adjusted for the company’s non-operating strategic investments. The largest of these is a 29% stake in Indian tobacco company ITC, which is worth more than £14 billion, or 27% of BTI’s entire market cap of £52 billion. On this market cap, the company expects to generate £40 billion in free cash flow over the next five years. Despite significant investments in its reduced-risk businesses, BTI’s free cash generation has remained robust, growing consistently over the past five years. Yet despite this impressive track record, the stock has traded sideways for more than a decade…” (Click here to read the full text)
On June 27, British American Tobacco p.l.c. (NYSE:BTI) declared a quarterly dividend of $0.743 per share, which fell in line with its previous dividend. With a dividend yield of 11.6% as of July 8, BTI is one of the best dividend stocks with over 8% yield.
At the end of March 2024, 19 hedge funds tracked by Insider Monkey reported having stakes in British American Tobacco p.l.c. (NYSE:BTI), down from 22 in the previous quarter. These stakes are collectively valued at over $588.6 million.
6. Rithm Capital Corp. (NYSE:RITM)
Number of Hedge Fund Holders: 20
Dividend Yield as of July 8: 9.49%
Rithm Capital Corp. (NYSE:RITM) ranks sixth on our list of the best dividend stocks with over 8% yield. The American asset management company focuses on real estate and financial services. The company was founded in 2013 and now has grown into one of the largest non-bank mortgage originators in the US. In the beginning, it concentrated on investments in mortgage servicing rights (MSRs). Previously known as New Residential Investment Corp., the company underwent a rebranding in June 2022 and now operates under the name Rithm Capital. Since July 2022, the stock has surged by nearly 11%.
Throughout its history, Rithm Capital Corp. (NYSE:RITM) has significantly leveraged its relationships within the industry. In 2023, the company acquired $1.4 billion worth of prime unsecured consumer loans from the Goldman Sachs Group. This acquisition was particularly advantageous for the company, capitalizing on its established expertise and experience in consumer finance. Later that year, the company acquired Sculptor Capital Management in a transaction valued at nearly $720 million. This strategic move brought in $32 billion in the company’s assets under management (AUM), with a total standing at $35 billion as of 2023.
While Rithm Capital Corp. (NYSE:RITM) is currently expanding and competing with major players, we believe it has substantial growth potential in the years ahead, given its strategic direction. The company has revamped its business model and is actively forming alliances within the industry to leverage opportunities. In addition, it continues to benefit from its servicing revenues, further enhancing its competitive position and outlook for future growth. Its net servicing revenue for the first quarter of 2024 jumped to nearly $555 million, from $15.8 million in the same period last year.
Rithm Capital Corp. (NYSE:RITM), one of the best dividend stocks on our list, announced a quarterly dividend of $0.25 per share on June 18, which was consistent with its previous dividend. In the most recent quarter, the company returned approximately $121 million to shareholders through dividends. As of July 8, the stock has a dividend yield of 9.49%.
Insider Monkey’s database of Q1 2024 indicated that 20 hedge funds held stakes in Rithm Capital Corp. (NYSE:RITM), up from 19 in the preceding quarter. These stakes have a total value of more than $212 million. With over 4.7 million shares, Long Pond Capital was the company’s leading stakeholder in Q1.
5. B&G Foods, Inc. (NYSE:BGS)
Number of Hedge Fund Holders: 21
Dividend Yield as of July 8: 9.72%
B&G Foods, Inc. (NYSE:BGS) is a New Jersey-based food company that specializes in food manufacturing and distribution. The company is restructuring its brand portfolio after its strategy of acquiring food brands through debt-financed deals proved unsuccessful, leading to net losses over the past two years. Its net loss for 2022 and 2023 came in at $11.4 million and $66.2 million, respectively. Since the start of 2024, the stock is down by over 31%.
Historically, B&G Foods, Inc. (NYSE:BGS) operated solely within a single industry segment. However, starting from the first quarter of 2024, the company has transitioned to operating and reporting results across four distinct business segments. This shift reflects the company’s recent structural changes and the development of its four business units: Specialty, Meals, Frozen & Vegetables, and Spices & Flavor Solutions. In the most recent quarter, all four segments of the company reported losses due to the fluctuations in the food sector.
That said, B&G Foods, Inc. (NYSE:BGS) anticipates that reshaping its brand portfolio will have a positive impact. In November 2023, the company divested its Green Giant US shelf-stable vegetable product line to Seneca Food Corporations, a key manufacturer of the line. The net proceeds from this transaction were applied to reduce long-term debt. The company retains ownership of its remaining brands.
B&G Foods, Inc. (NYSE:BGS) pays a quarterly dividend of $0.19 per share and has a dividend yield of 9.72%, as reported on July 8. Its dividend is relatively safe because of its stable cash flows. In the first quarter of 2024, the company generated over $35 million in operating cash flow. The company has paid regular dividends to shareholders since its inception, which places it on our list of the best dividend stocks with over 8% yield.
The number of hedge funds tracked by Insider Monkey owning stakes in B&G Foods, Inc. (NYSE:BGS) grew to 21 in Q1 2024, from 16 in the previous quarter. These stakes have a total value of over $33.3 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q1.
4. EPR Properties (NYSE:EPR)
Number of Hedge Fund Holders: 26
Dividend Yield as of July 8: 8.18%
EPR Properties (NYSE:EPR) is a Missouri-based real estate investment trust company that mainly invests in entertainment properties, including movie theaters, amusement parks, and ski resorts. The company’s CEO recently highlighted that the high cost of capital has been a challenge due to increased borrowing expenses. However, its current opportunities are exceeding its level of capital. He also stated that movie theater attendance has returned to pre-Covid levels, rejecting the idea that streaming will overtake the theater industry. As of March 31, 2024, the company has 135 theater properties.
What gives EPR Properties (NYSE:EPR) an edge over its competitors is its diversified portfolio, allowing it to outperform its peers. The theatre segment is its largest asset, accounting for 37% of annualized EBITDARE. The company has invested approximately $2 billion in theatrical properties over two decades. Analysts aren’t too fond of this heavy reliance on theatrical properties, as it limits growth in other areas. The company’s exposure to movie theaters proved problematic in 2020 when it had to cut its dividend due to the struggling state of movie chains as the global health crisis unfolded. However, in its final report for 2023, the company announced plans to boost investments in other types of properties and envisions a $100 billion investible universe of properties it could potentially pursue. Street analysts have maintained a $45.10 price target on the stock, which reflects an 8.2% upside potential.
EPR Properties (NYSE:EPR) can be a good addition to dividend portfolios because of the company’s diversified portfolio and monthly dividends. It currently offers a monthly dividend of $0.285 per share for a dividend yield of 8.18%.
As per Insider Monkey’s database of Q1 2024, 26 hedge funds tracked by Insider Monkey owned stakes in EPR Properties (NYSE:EPR), up from 25 in the previous quarter. These stakes have a total value of nearly $184 million. Among these hedge funds, Cliff Asness’ AQR Capital Management was the company’s leading stakeholder.
3. OUTFRONT Media Inc. (NYSE:OUT)
Number of Hedge Fund Holders: 30
Dividend Yield as of July 8: 8.27%
OUTFRONT Media Inc. (NYSE:OUT) is an American outdoor media company that operates billboards and transit displays. The company is well-placed to benefit from the anticipated drop in interest rates and a recovery in advertising revenue. Global advertising spending is projected to increase by 5.0% in 2024, up from 3.3% in 2023, reaching $754.4 billion. Improved spending forecasts in key markets such as the UK, Germany, the US, Japan, and France drive this growth.
In the first quarter of 2024, OUTFRONT Media Inc. (NYSE:OUT) reported revenue of $408.5 million, which showed a 3.21% growth from the same period last year. The company showed growth in both its segments, with the management showing confidence in its billboard division. Revenues in the billboard segment grew by $8.2 million to $328.8 million in Q1 2024. The company highlighted increased demand in its billboard division, resulting in higher rates, and expected to boost expanding margins as well. Its adjusted funds from operations (AFFO) in the most recent quarter jumped to $23.2 million, from $8.8 million in the prior-year period.
OUTFRONT Media Inc. (NYSE:OUT) is currently exploring opportunities in digital out-of-home (DOOH) advertising. The company appears to be uniquely positioned to capitalize on this trend, particularly as features like programmatic advertising enhance the value of its DOOH assets and increase advertising rates. DOOH is also becoming more popular among consumers, with an 82% aided ad recall rate, indicating that people overwhelmingly remember what they see in these digital ads.
OUTFRONT Media Inc. (NYSE:OUT) offers a quarterly dividend of $0.30 per share and has a dividend yield of 8.27%, as of July 8. The company returned $52.4 million to shareholders through dividends in Q1 2024, which makes OUT one of the best dividend stocks with over 8% yield. Analysts’ consensus price target of $17 represents an upside potential of 17.2%, as of July 8.
According to Insider Monkey’s database of Q1 2024, 30 hedge funds owned stakes in OUTFRONT Media Inc. (NYSE:OUT), compared with 31 in the previous quarter. These stakes have a total value of over $204 million.
2. Xerox Holdings Corporation (NASDAQ:XRX)
Number of Hedge Fund Holders: 31
Dividend Yield as of July 8: 8.80%
Xerox Holdings Corporation (NASDAQ:XRX) is an American company that develops and manufactures print and digital document products and offers related services. The company faced significant challenges during the pandemic and has struggled to regain its footing. Despite efforts to balance its operations, such as reducing its workforce by 15%, the stock is experiencing consistent losses. Its first-quarter earnings didn’t impress analysts and investors, causing the stock to decline by nearly 40% since the start of 2024. One of the main reasons for the earnings decline is that the company is going through structural changes. The company’s core print business saw a 12.6% year-over-year decline, bringing in $1.43 billion. Despite this, management remains confident that their team and strategy will effectively reinvent the company and meet adjusted operating income goals. They have also reaffirmed their FY24 guidance, projecting an annual revenue decrease of 3% to 5% in constant currency.
Xerox Holdings Corporation (NASDAQ:XRX) currently trades at a forward P/E ratio of 2.98, which indicates a very low valuation. This suggests that it may be undervalued at its current price. However, there is a risk that the valuation could decrease further if the market reacts negatively to the company’s recent earnings miss. Analysts have maintained a consensus Sell rating on the stock with a $14 price target, reflecting an upside potential of 29%.
While Xerox Holdings Corporation (NASDAQ:XRX) is not currently presenting a rosy picture, its cost-cutting initiatives, reliable dividend payments, and positive cash flow guidance provide some relief amidst difficult conditions. For FY24, the company expects to generate approximately $600 million in free cash flow, which is good news for dividend investors. The company has not raised its dividends since 2017 but has maintained regular payments over these years. In fact, given its challenging financial situation, it is commendable that the company did not reduce its payouts during the pandemic. The company offers a quarterly dividend of $0.25 per share. With a dividend yield of 8.80% as of July 8, XRX is one of the best dividend stocks on our list.
Of the 920 hedge funds tracked by Insider Monkey at the end of Q1 2024, 31 funds owned stakes in Xerox Holdings Corporation (NASDAQ:XRX), up from 25 in the previous quarter. These stakes have a collective value of over $88.3 million.
1. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 41
Dividend Yield as of July 8: 9.20%
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) tops our list of the best dividend stocks with over 8% yield. The company owns and operates retail pharmacy chains and other pharmaceutical manufacturing and distribution companies. In a disappointing start to 2024, the company cut its dividend after maintaining a streak of 47 consecutive years of growth. The decision aimed to retain more cash to support growth initiatives and bolster its balance sheet.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA)’s new CEO, Tim Wentworth, is on a mission to turn things around for the company. In a recent development, he announced plans to close a significant number of underperforming stores and scale back the company’s primary-care business ventures. Along with these closures, the company intends to implement a US Retail Pharmacy action plan aimed at enhancing customer and patient experiences across various channels. Additionally, the company will streamline and focus its U.S. Healthcare portfolio and align its U.S. pharmacy and Healthcare organizations to improve market capabilities.
The big question is whether these strategies are benefiting Walgreens Boots Alliance, Inc. (NASDAQ:WBA). The fiscal Q3 2024 earnings revealed that the company is facing a challenging operating environment. Ongoing pressures on US consumers and recent market dynamics have negatively affected pharmacy margins. That said, the company generated revenues of $35.4 billion, up 2.6% from the same period last year and ahead of expectations. Cash position was also strong, with $605 million in operating cash flow and $334 million in free cash flow, showing an increase of $778 million from a prior-year period. Despite these bright spots, the negatives outweigh the positives for Walgreens Boots Alliance, Inc. (NASDAQ:WBA). The company has lowered its guidance for the second time this year, concerning investors.
That said, there are some rays of hope with the new CEO and the measures being implemented, even if they take time. Additionally, the company’s cash flow suggests a promising future for dividends, which will also be bolstered by cost-cutting efforts. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) currently offers a quarterly dividend of $0.25 per share and has an impressive dividend yield of 9.20%, as of July 8.
The number of hedge funds tracked by Insider Monkey owning stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) jumped to 41 in Q1 2024, from 31 in the previous quarter. These stakes have a total value of over $715 million. Among these hedge funds, Sessa Capital was the company’s leading stakeholder in Q1.
While we acknowledge the potential of WBA as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than WBA but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
