Yahoo Finance Cardinal Health Inc (NYSE:CAH) Is An Attractive Dividend Stock, Here’s Why
Over the past 10 years Cardinal Health Inc (NYSE:CAH) has returned an average of 2.00% per year from dividend payouts. The company is currently worth US$16.81b, and now yields roughly 3.52%. Should it have a place in your portfolio? Let’s take a look at Cardinal Health in more detail. View out our latest analysis for Cardinal Health
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Cardinal Health fare?
The current trailing twelve-month payout ratio for the stock is 34.24%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 34.07%, leading to a dividend yield of around 3.62%. Moreover, EPS is forecasted to fall to $3.86 in the upcoming year.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. CAH has increased its DPS from $0.56 to $1.91 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CAH a true dividend rockstar.
Relative to peers, Cardinal Health has a yield of 3.52%, which is high for Healthcare stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Cardinal Health ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three relevant factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for CAH’s future growth? Take a look at our free research report of analyst consensus for CAH’s outlook.
Valuation: What is CAH worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CAH is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
