Just when it looked like Walgreens Boots Alliance (WBA) turned the corner, the firm faced a lawsuit. Last Friday, after markets closed, the Department of Justice sued the drugstore. It accused the firm of illegally filling opioid prescriptions.
The DOJ said that Walgreens and its subsidiaries dispensed millions of unlawful prescriptions over the last 12 years. As a result, Walgreens let millions of opioid pills and other controlled substances flow out of its stores. The DOJ also accused the firm of seeking reimbursement for those prescriptions, which allegedly violated the False Claims Act.
Related Investments
Investors who want to avoid this firm’s legal troubles may consider CVS Health (CVS). CVS stock bottomed at below $45, gaining 9.6% last week. The stock’s dividend yields 5.06%. Shares are rebounding as investors take advantage of the recent drop. At the time, markets worried that the government would end pharmacy benefit managers.
Investors may also consider UnitedHealth Group (UNH). The healthcare plan provider reported a rare earnings miss. In Q4, revenue increased by 6.8% to $100.8 billion. Non-GAAP EPS was $6.81.
Your Takeaway
Bears hold an 8.95% short interest against Walgreens. The pessimism against the firm is modest because the company is committed to its dividend. The stock still yields 7.99% which management does not plan on cutting. Shareholders collect income while waiting for the firm to restructure its business.
