S&P Dow Jones Indices announced late Tuesday that Walgreens Boots Alliance (WBA) replaces General Electric (GE) in the Dow Jones Industrial Average, effective prior to the open of trading on June 26.
General Electric (GE) out
General Electric is removed from the Dow Jones Industrial Average, 122 years after first being handpicked by Charles Dow himself. GE already fell out of the Dividend Aristocrat list in 2009 due to a dividend cut. Furthermore, the GE stock has fallen nearly 80 percent from highs in 2000 and the stock slipped 1.5 percent in after-hours trading following the announcement.
Also, the low price of GE shares means the company has a weight in the index of less than 1.5%, which is one of the reasons to remove it from the index.
Walgreens Boots Alliance (WBA) in
“Walgreens Boots Alliance’s share price is higher, and it will contribute more meaningfully to the index. It will also help the index better represent the U.S. market and economy.”, according to S&P Dow Jones Indices. WBA is one of the 51 dividend aristocrats and Walgreens has already increased its dividend for 42 years in a row.
WBA is a pharmacy-led health and wellbeing company. They operate through three segments: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Retail Pharmacy USA segment consists of the Walgreen Co. (Walgreens) business, which includes the operation of retail drugstores, care clinics and providing specialty pharmacy services. The Retail Pharmacy International segment consists primarily of the Alliance Boots pharmacy-led health and beauty stores, optical practices and related contract manufacturing operations. The portfolio includes brands like: Walgreens, Duane Reade, Boots and Alliance Healthcare. Global WBA brands, including No7, Botanics, Liz Earle and Soap & Glory.
WBA’s stock price is on Wednesday up with 5% and trading around $68. The forward dividend & yield are 1.60 and 2.43%. The PE-ratio is 16.99, which is close to the 10-year average.
