It's no secret that Walgreens Boots Alliance (WBA 0.40%) isn't one of those exciting stocks that could make shareholders wealthy overnight investors. But since it's a dividend-paying stock, there's probably a belief one could become a millionaire slowly by owning this pharmacy retail company. After all, its business model of operating pharmacies and providing healthcare services is difficult to replicate or go obsolete. Moreover, its retail locations often rest on valuable real estate contributing to healthy sales volumes, and perhaps also serving as an edge over competitors.

But how does Walgreens' potential live up to its actual performance? Let's check it out.

How investing in Walgreens could (theoretically) make you richer

In theory, Walgreens' stock offers two opportunities for wealth-building. The first is via share-price appreciation, in which the company's consistent financial performance and expansion of its earnings increase the value of its stock by leading investors to expect that it will be worth more in the future than it is today. On that note, since mid-2013, its trailing-12-month (TTM) revenue grew by 88%, surpassing $136 billion, and its relatively stable sales of prescription drugs and consumer health goods from its pharmacies ensured that its top line didn't retrace by very much over time, even during downturns like at the start of the pandemic. Likewise, share-repurchasing policies can boost the stock price a bit; in the TTM period, it bought back $150 million worth of its shares.

The second opportunity is via long-term reinvestment of its dividend, which management opts to hike from time to time, thereby increasing the effective dividend yield available to shareholders and increasing the pace at which their shares compound in value. Since June 2003, the business boosted its payout quite a few times, ultimately raising it by around 1,010%. And right now, its forward dividend yield is 6.6%, which is vastly better than its competitors like CVS Health and most other stocks. 

The trouble with these two stories is neither of them appears to be true in terms of investors getting richer than they would be in comparison to other investments. If you invested $1,000 in Walgreens stock and held it over the last 10 years while reinvesting all of your dividend payments along the way, you'd have experienced a total return of (brace yourself for this huge number)...$889. In other words, you'd have lost money on this pharmacy stock, which many investors likely assume to be relatively safe. In contrast, if you'd bought shares of a market-tracking index fund instead, you'd have $3,268. And if you had bought shares of a heavily hyped and somewhat risky growth stock like Tesla, you'd have more than $35,000. 

Those are the types of returns you'd need to become a millionaire, and Walgreens simply hasn't ever exhibited them. Its current plans to liquidate some of its investment portfolio to pay down debts, cut $800 million in costs in 2024, and advance the profitability of its healthcare segment have a chance of changing that.

You're probably looking for a different type of stock altogether

So, looking at its current state of affairs, Walgreens isn't the ideal stock if you are realistically looking to amass wealth over the long run. Management's promise of stable, wealth-generating returns seems like a mirage. Given its substantial long-term debt and capital-lease obligation load of $38.5 billion, not to mention its entrenched focus on the slow-growth and narrow-margin retail pharmacy segment, it probably does not have the financial resources nor the organizational positioning necessary to grow quickly enough to make anyone rich.

While it's still technically faintly possible the company's fortunes could take a dramatic turn for the better and make shareholders millionaires, in reality, it will almost certainly not help you become a millionaire. An investment in its shares is likely to lose value, which will actually make it harder to join the millionaire's club. So avoid buying it, and look for an investment that's growing quickly instead of fighting to stave off its decline.