Investing in companies with competitive advantages and sustainable dividend payouts is one of the best ways to generate long-term wealth creation. So, what’s a great place to start when looking for high-quality dividend growth stocks? To me, you can’t go wrong with the Dividend Aristocrats, an exclusive group of 65 stocks that have at least 25 years of consecutive increases. One notable example from this list is health care retail giant Walgreens Boots Alliance (NASDAQ:WBA). Recently, WBA stock has been in the midst of a kind of turnaround.

Walgreens is an industry leader that has faced challenges in recent years, but the company’s turnaround is gaining speed while the stock yields 4.06%. WBA is a pharmacy-led company that operates a large retail business. In fact, primarily based in the U.S. but also operating internationally, Walgreens has one of the largest physical footprints of any retailer in the world.

This company’s stores distribute a wide variety of products, such as personal care, food and beverage, beauty and general merchandise. However, at its core is a massive platform for pharmacy distribution. This business has given it sustainable earnings growth over time — and should drive Walgreens and WBA stock for years to come.

WBA Stock: Recent Earnings Show Continued Momentum

Currently, Walgreens generates over $130 billion in annual revenue and trades with a market capitalization of $41 billion. Furthermore, WBA reported third-quarter earnings on Jul. 1 and handily beat expectations on both the top and bottom lines. It even raised guidance for the year on its strong results, which should mean great things for WBA stock.

For the quarter, sales from continuing operations rose 12% to $34 billion. That was driven by strong growth in foot traffic as the company lapped its weak 2020 pandemic period. Furthermore, the U.S. segment saw sales rise 5% year-over-year (YOY) to $28.7 billion. Meanwhile, the international segment was up 76% to $5.3 billion. Comparable sales in the U.S. were also up 6.4% YOY in Q3, driven by a gain in pharmacy sales.

Walgreens noted that about 600 basis points of its comparable sales gain was due to Covid-19 vaccinations. However, “prescriptions filled” also soared about 9% YOY. What’s more, given the possibility that Covid booster shots will become a regular practice in the future, the company could turn this temporary tailwind into a longer-term benefit.

Moving on, earnings from continuing operations came to $1.27 in Q3, up sharply from a loss of $2.05 in the year-ago period. Net cash also came to $4.3 billion (up $912 million YOY) while free cash flow totaled $3.3 billion (an $873 million improvement).

Lastly, Walgreens also completed the divestiture of its Alliance Healthcare business “for a total consideration of $6.5 billion.” Some of that money was used to retire $3.3 billion in debt. Management said the balance of the proceeds would be invested in growth initiatives for its pharmacy business.

Growth Catalysts Remain Intact for the Stock

So, Walgreens had a solid Q3. But that’s not the only reason to like WBA stock.

For starters, this company has very impressive growth history, having added an average of 12% to its earnings per share (EPS) for the decade ending 2019. Specifically, it was able to grow EPS for the period via higher revenue, higher profit margins and a lower share count through repurchases.

Looking forward, I expect a more modest 5% growth rate annually, which factors in low-single digit revenue growth, fairly stable profit margins and a low-single digit reduction in the share count annually.

But that’s not all. Walgreens is also levered to an aging population in the U.S. and elsewhere in the world, given it is a massive distributor of pharmaceuticals. That should give the business even more endurance.

Lastly, the company has also been deleveraging from its Alliance merger that occurred a few years ago, which saw its long-term debt top more than $12 billion at the time. Today, Walgreens has under $8 billion in long-term debt. That will help improve margins through lower interest expenses. It also means the company has more cash available to invest in growth initiatives.

Final Thoughts on WBA Stock

All told, Walgreens should produce strong returns in the years to come, consisting of the 5% earnings growth just discussed as well as its attractive 4.06% dividend yield. In addition to that, the stock is currently undervalued, which could provide a small tailwind to total shareholder returns as a result.

With 5% expected earnings growth, a more than 4% dividend yield and a small tailwind from the valuation, Sure Dividend sees 10.6% total expected returns for buyers of the stock today. Plus, Walgreens even boosted its dividend by 2.1% in July for a new annualized payout of $1.91 per share.

As one of the Dividend Aristocrats, WBA offer access to dividend streams that have proven to be resilient through all kinds of economic environments. No doubt, WBA stock has been able to weather recessions for nearly five decades. The company’s dividend yield is also about three times the S&P 500’s and offers attractive total returns. So, this name is a strong choice for dividend investors today.

On the date of publication, Bob Ciura did not have (either directly or indirectly) positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bob Ciura has worked at Sure Dividend since 2016. He oversees all content for Sure Dividend and its partner sites. Prior to joining Sure Dividend, Bob was an independent equity analyst. His articles have been published on major financial websites such as The Motley Fool, Seeking Alpha, Business Insider and more. Bob received a bachelor’s degree in Finance from DePaul University and an MBA with a concentration in investments from the University of Notre Dame.