Yahoo Finance Should Cardinal Health Inc (NYSE:CAH) Be Your Next Stock Pick?
Cardinal Health Inc (NYSE:CAH) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of CAH, it is a financially-sound company with a a strong track record of performance, trading at a great value. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Cardinal Health here.
Undervalued established dividend payer
In the previous year, CAH has ramped up its bottom line by 26.00%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 22.56%, which is an notable feat for the company. CAH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that CAH manages its cash and cost levels well, which is a key determinant of the company’s health. CAH seems to have put its debt to good use, generating operating cash levels of 0.31x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
CAH’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of CAH’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, CAH’s share price is trading below the group’s average. This supports the theory that CAH is potentially underpriced.
Next Steps:
For Cardinal Health, I’ve compiled three fundamental aspects 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.
Dividend Income vs Capital Gains: Does CAH return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from CAH as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CAH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
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.
