Rising demand for medicines and COVID-19 tests with the continued spread of the Delta variant we think should benefit pharmacy stocks Walgreens Boots (WBA) and Rite Aid (NYSE:RAD). But which of these stocks is a better buy now? Let’s find out. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in Deerfield, Ill., and Rite Aid Corporation (RAD) in Camp Hill, Pa., are popular drug stores in the United States. WBA is a pharmacy-led health and wellbeing company that operates through three segments—Retail Pharmacy USA; Retail Pharmacy International; and Pharmaceutical Wholesale. As of August 31, 2020, WBA operated 9,021 retail stores under the Walgreens and Duane Reade brands and six specialty pharmacies. RAD operates a retail drugstore chain, selling prescription drugs, nonprescription medications, health and beauty aids, household items, pet care, and other every day and convenience products. It also offers drug benefits under the federal government's Medicare Part D program and insurance offerings. As of April 28, 2021, the company operated approximately 2,500 retail pharmacy locations in 17 states.
Because the resurgence of COVID-19 cases has led to increased demand for testing and medicines, pharmacy companies are witnessing rising sales. The global pharmacies and healthcare stores market is expected to grow at a 5%% CAGR to $1.31 billion by 2025. So, both UNP and CSX (NASDAQ:CSX) should benefit.
While RAD has gained 2% in price year-to-date, WBA has surged 21.4%. WBA is a clear winner with 19% price gains versus RAD’s negative returns in terms over the past nine months. But which of these stocks is a better pick now? Let’s find out.