3 Dividend Aristocrats to Buy on the Dip

After a rocky start to October, the major benchmark indices finished Thursday with a three-session winning streak, triggered by optimism surrounding Senate Majority Leader Chuck Schumer’s recent announcement that lawmakers have reached a deal to increase the debt ceiling in the near term to avoid a government default. However…

given the uncertainties surrounding the infrastructure bill, potential monetary policy changes, and supply chain constraints, October is expected to be a volatile month.

Since dividend-paying stocks can reduce overall portfolio risk by securing a steady income stream, especially when markets are volatile, they can be ideal bets now. Investors’ confidence in dividend aristocrats is evident from the First Trust S&P International Dividend Aristocrats ETF’s (FID) 22.8% return over the past year.

So, fundamentally sound dividend aristocrats Walgreens Boots Alliance, Inc. (WBA – Get Rating), West Pharmaceutical Services, Inc. (WST – Get Rating), and W.W. Grainger, Inc. (GWW – Get Rating), which have recently witnessed price dips, could be solid bets now. Solid growth attributes and attractive dividend yields of these companies could help investors dodge expected market volatility.

Walgreens Boots Alliance, Inc. (WBA – Get Rating)

WBA is a global retail pharmacy that operates through three segments Retail Pharmacy USA; Retail Pharmacy International; and Pharmaceutical Wholesale. The company’s segments consist of the Walgreen Co. (Walgreens) business; retail drugstores; care clinics; health and beauty retail businesses; and optical practices.

WBA paid a $0.48 quarterly dividend on September 10, 2021. The stock distributes a $1.91 per share dividend annually, which translates to a 3.99% yield. The company’s dividend has grown at a 5.3% rate over the past five years.

Last month, WBA announced an investment of $970 million in a health specialty pharma care, Shields Health Solutions, through its subsidiary, Walgreen Co. The company believes that this strategic investment can help expand its pharmacy business and healthcare reach in communities.

WBA’s sales increased 12.1% year-over-year to $34.03 billion for the fiscal third that quarter ended May 31, 2021. The company’s gross profit grew 20% from the year-ago value to $7.15 billion. Its operating income came in at $1.13 billion for the quarter, compared to an operating loss of $1.68 billion in the prior-year quarter. Also, the company’s net earnings amounted to $1.17 billion, compared to a net loss of $1.73 billion in the fiscal third quarter of 2020.

Analysts expect WBA’s revenue for the fiscal year 2022 to be $136.23 billion, representing a 3.6% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Also, its EPS is expected to grow 11.2% in the current year. Its stock price has increased 31.1% over the past year. Also, it is currently trading 16.1% below its 52-week high of $57.05, which it hit on April 5, 2021.

WBA’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, which equates to a Buy rating in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has a B grade for Value, Stability, and Growth. We’ve also graded WBA for Sentiment, Momentum, and Quality. Click here to access all of WBA’s grades. WBA is ranked #2 out of 6 stocks in the Medical – Drugs Stores industry.

Click here to checkout our Healthcare Sector Report for 2021

West Pharmaceutical Services, Inc. (WST – Get Rating)

WST provides technologically advanced containment and delivery solutions for injectable drugs and healthcare products to pharmaceutical, biotechnology, generic, and medical device companies. The company operates through the following segments: Proprietary Products; and Contract-Manufactured Products. Its products include primary packaging, reconstitution, drug delivery systems, contract manufacturing, analytical lab services, and integrated solutions.

WST paid a $0.17 quarterly dividend on August 04, 2021. The stock distributes a $0.68 per share dividend annually, which translates to a 0.16% yield. The company’s dividend has grown at a 7.2% rate over the past five years.

In August, WST appointed Molly Joseph to the company’s Board of Directors. The company believes that Ms. Joseph’s experience in building and leading clinically integrated medical delivery systems and health insurance systems should help the company deliver…

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