Photo: Mike Mozart, Flickr

It's always smart to consider dividend-paying stocks for your portfolio, as dividends can be such powerful wealth boosters. (Really -- they're not just for retirees!) A great place to find some solid contenders is among Dividend Aristocrats, companies that have raised their dividend payouts each year for at least the last 25 years. Let's get to know one Dividend Aristocrat, Walgreen Company (NASDAQ:WBA), and see whether this is a good time to invest in some shares.

Nuts and bolts
Walgreen is the largest drugstore chain in the U.S., with annual revenue topping $75 billion and a market capitalization of close to $60 billion. More than eight million customers visit, call, or contact the company daily, and it operates more than 8,200 drugstores in all 50 states and beyond.

The company has rewarded investors well, averaging 15% annually over the past five years as well as the past 20 years.

Why Walgreen is appealing
Why else would someone want to own Walgreen? Well, let's start with its dividend, which yields 1.7%. It might not seem like the fattest payout, but it has been growing briskly, averaging annual gains of 20% over the past decade. Meanwhile, its payout ratio of 44% shows it's distributing 44% of earnings to shareholders, leaving plenty of room for further dividend hikes. It has been paying a dividend for more than 80 years in a row and has increased it annually for 38 consecutive years. (Not bad, eh?)

The company is a major player among retail pharmacies, with a growing market share that recently hit 19%. Its free cash flow has been handily topping $2 billion annually for a while now, fueling dividend hikes, share buybacks, and debt reduction, among other things. Walgreen's long-term debt has been rising in recent years in part due to acquisitions such as the 2010 purchase of New York City's Duane Reade pharmacy chain.

More significant is the company's buyout of the major European pharmacy chain Alliance Boots. Walgreen bought 45% of the company in 2012 and is now buying the rest, including assuming its debt. This will make the company the world's largest drug wholesale and distribution network, with 11,000 stores and 370 distribution centers. It will also become one of the largest buyers of generic drugs, with greater purchasing power. Alliance also comes with higher-margin private-label health and beauty products that might now sit on U.S. Walgreen's shelves.

One disappointment for some is that though Walgreen is buying a European company with a much lower tax rate, it announced early on that it was not planning to go for the tax inversion that could lower its tax hit by a third. Its board of directors was apparently not comfortable with the idea of the inversion, and is opting to remain headquartered in the U.S., a move that seems particularly good now that the U.S. government is looking to rein in inversions.

The Alliance Boots purchase brings a lot to Walgreen. Source: Alliance Boots

Why you might hold off on Walgreen
Everything is not absolutely perfect at Walgreen, though, as its financial statements haven't been quite as impressive as some would want. Revenue and earnings have averaged growth of 3% and 6%, respectively, over the past five years. It's doing better lately, though, as in the company's last quarter, revenue grew 6% year over year, while earnings advanced 7%. (Note that Walgreen reports its latest quarterly results on the September 30, so keep an eye out for them if you're interested.)

Some might worry about Walgreen's competitive position against powerhouse CVS Health and recovering Rite Aid. Compared to CVS Health's more-than-800 MinuteClinics, Walgreen's in-store clinics only top 400. Still, it's generating plenty of cash and can boost those numbers, and more clinics can drive more in-store purchases and prescriptions. The purchase of Alliance Boots will boost performance, too, delivering savings estimated to total $1 billion by 2017.

In-store clinics can drive more revenue. Source: Walgreen

Is it time to buy?
It's hard to argue against considering Walgreen for your portfolio. It has a lot going for it, such as a growing and aging global population (and with its Alliance Boots buy, it can now serve millions beyond America), Obamacare delivering more insured folks with prescriptions in hand, and even the decision of rival CVS Health to stop selling cigarettes, which is likely to drive a sizable number of customers to Walgreen's for their smokes and other items.

The company's shares don't appear to be a screaming bargain at recent levels, though, with current and forward-looking P/E ratios (of 20.8 and 17.3, respectively) not below the five-year average of 16.6. Its price-to-sales ratio and price-to-cash-flow ratio are also above its five-year averages and the industry averages. So go ahead and keep an eye on Walgreen, but this may not be the best time to buy this Dividend Aristocrat. It's not a terrible time, though, if you can be patient.

Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned. The Motley Fool recommends CVS Health. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.