Walgreens Boots Alliance (NASDAQ:WBA) has over 13,000 pharmaceutical and retail stores in 11 countries. And it remains one of the dominant pharmacies in the U.S. and Britain. And these are good market segments to be in. Drug spending continues to be buoyant with growth in the U.S. alone on a annual upward march.

And while Britain has its challenges with concerns over Brexit, the U.S. retail pharma sales make up 75% of the company’s revenues.

Sales overall for WBA are up by 11.30% for the trailing year. And in a market where margins can be thinner, Walgreens maintains an operating margin that is running at an annual rate of 4.70%. This, in turn, is driving very impressive returns for the company. The return on WBA stock owners’ equity is at 20.70% and the return on assets is running at 7.80%. And when looking at the capital of the company, it also delivers the goods with a return on capital of 14.10%.

It does this with very modest leverage. Its cash continues to be ample with continuing flows from rising retail sales. And it has minimal debt with debt-to-assets sitting at only 21.10%.

And WBA stock pays a nice dividend that continues to be above the average of the S&P 500 at 2.60%. The current distribution is running at 44 cents a share and it has been rising on average for the past five years by 7.32%.

Why WBA Stock Is a Steal Right Now

And yet, Walgreens stock is valued at an over 50% discount to the trailing sales. And again, note that sales continue to rise at the same time — making it even more of a bargain.

The price-to-book ratio for WBA is at 2.50X, which is modest in the current market. And that underlying book value continues to climb from recent lows in 2017 to a current $27.14 per share.

WBA stock is a bargain stock.

And management seems to notice this. Share buying by insiders has been on a tear throughout 2018 with buys topping out at over $85 million into December 2018.

But what’s holding back the outside stock buyers? First there is Amazon (NASDAQ:AMZN). AMZN, through its acquisition of an online pharmaceutical subscription company, is building its capabilities to reach consumers directly. And that is competition. But WBA is so ubiquitous in its availability and ease of delivery, that it is more of a threat to Amazon’s developing market for now than Amazon is to its business.

Then there is the concern over the costs and efficiency of brick-and-mortar retail, which is also part of the Walgreen’s business. Again, Walgreens continues to provide an expansive localized outlet for convenience for consumers beyond just prescription drugs. And there is the move already underway by management to review every store location in its vast network for the greatest returns for shareholders, including management, as noted above.

For dividend income and a stock that is defensive in its market segment, Walgreens stock is a bargain buy at a discount to rising revenues right now in a challenging general stock market.

Neil George is the editor of Profitable Investing and does not have any holdings in the securities mentioned above.