F.A.S.T. Find more details information on this page! Business Analysis The investment thesis for Cardinal Health hinges on a fast-aging population driving higher U.S healthcare spending, especially on pharmaceuticals and medical supplies, over the coming decade and beyond. The information on this site is in no way guaranteed for completeness or accuracy. On November 22, 2017, I published an article titled: “Cardinal Health: A Dividend Aristocrat the Risk Is Already Priced In.” At that time, Cardinal Health Inc (NYSE:CAH) was trading at approximately $56 per share and was paying a dividend of $1.81 representing a dividend yield of about 3.1%. November 2017. stated above that I would like to cast a bright light on. Consequently, the company has proven to be a very defensive holding it takes time for a business to increase its intrinsic value. Under no circumstances does any information on Fastgraphs.com constitute a recommendation to buy or sell a security, nor does it give investment advice. var chart = new google.visualization.LineChart(document.getElementById('chartYield')); This track record speaks to the resilience of Cardinal Health’s business model. a lot easier to be patient when the business is paying you lavishly while you Another reason why I’m not disappointed in Cardinal Health’s chart.draw(view, options); It distributes these products to hospitals and other healthcare providers. Nothing says “stable, growing, and healthy business” like 25+ years of consecutive dividend growth. Total expected returns are below our requirement for a buy rating, making the stock a hold. ['5 Years',-41.7,'#ff0103'],]); chart.draw(view, options); As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company’s net income after tax. ['2009',32.3,3.23],['2010',1.98,3.23],['2011',2.07,3.23],['2012',2.35,3.23],['2013',1.77,3.23],['2014',1.65,3.23],['2015',1.68,3.23],['2016',2.41,3.23],['2017',2.99,3.23],['2018',5.28,3.23],['2019',3.8,3.23],['Current',3.99,3.23],]); Still, Cardinal Health remains profitable and the dividend continues to be well-covered. The Pharmaceutical segment is by far the company’s largest, as it represents nearly 90% of total revenue. ['3 Year',-5.2,'#ff0103'],['5 Years',-6.1,'#ff0103'], Nothing says “stable, growing, and healthy business” like 25+ years of consecutive dividend growth. Simply Wall Street Pty Ltd
Clearly, these are both more consistent and more predictable than trying to guess where the price might go over the short run. For example, Cardinal Health stock could see its valuation improve due to reduced litigation risk. back in February, with its top and bottom line beating the Zacks Consensus Estimate. We analyzed all of Berkshire's dividend stocks inside. is also very volatile, as indicated by the jagged nature which it has displayed However, I am not personally disappointed in the least, because I had invested in Cardinal Health (CAH) based on my confidence in the company’s dividend and dividend growth potential. As a Dividend Aristocrat, Cardinal Health is likely to continue raising its dividend … Cardinal Health’s earnings per share have shrunk at 62% a year over the past five years. price has fallen to $50 per share based on yesterday’s close. var options = {title: 'Historical Yield', curveType: 'function', chartArea: {width: '94%', height: '85%'}, bar: {groupWidth: ' 90%'}, legend: {position: 'bottom'}, series: { 1: { lineDashStyle: [2, 2] }}}; Con Edison faces intense political pressure following Tropical Storm Isaias, which hit the East Coast on August 4. Fortunately, Cardinal Health continues to grow revenue. chart.draw(view, options); It also serves over 6,500 laboratories with more than 51,000 laboratory products. Cardinal’s two business segments, Pharmaceutical and Medical, generated revenue of $35.7 billion and $4 billion, respectively. Answers to common questions and customer support. The company’s personal protection equipment segment is seeing increased Overall, the current growth headwinds facing Cardinal Health seem likely to persist. On the other hand, as a value investor, I totally unpredictable. In recent years, the healthcare sector has suffered a black eye from a public relations standpoint. consecutive years. Consequently, my dividend income has been increasing each year – which was my primary objective. Currently, I still consider the company attractively valued with an above-average dividend yield that appears safe. Now, the more rapidly prices fall, the more difficult it becomes for distributors like Cardinal to resell drugs from manufacturers to pharmacies at a profit.”. Two Dead Satellites May Collide Tonight. The orange line on the above graph depicts earnings, and the white line the dividend. © Copyright 2020 F.A.S.T. You generally have to buy full shares of the dividend aristocrats… investment horizon is at a minimum 3 to 5 years (a typical business cycle) and Taking these items collectively, we are forecasting 4% annual EPS growth over the next five years. long as the COVID-19 pandemic persists, demand for these products will remain In addition to changes in the valuation multiple, future returns will be generated from earnings growth and dividends. [caption id="attachment_522133" align="alignnone" width="400"] Copyright: mozakim / 123RF Stock Photo[/caption], Q1 2020 hedge fund letters, conferences and more. Moreover, the dividend appears secure, with a projected dividend payout ratio of approximately 39% for fiscal 2020. the least, because I had invested in Cardinal Health based on my confidence in As a result, I would expect above-average longer-term total The chart below displays the total price return(%) of Cardinal Health Inc. for different periods: The chart below displays the (CAGR) total return (%) including all dividends paid of Cardinal Health Inc. for different periods: google.load('visualization', '1', {packages:['corechart']}); Still, we prefer to be cautious when it comes to the fair value estimate. If you’re an investor searching for a healthcare stock to add to your portfolio, make sure to keep CAH on your shortlist.”, Cardinal Health: FAST Graphs Fundamentals Analyze Out Loud Video. The Wall Street Journal notes that “drug distributors had feasted for years on stable or rising drug prices, which allow them to more easily mark up prices while profiting by arbitraging annual price increases. On November 22, 2017, I published an article titled: “Cardinal Health: A Dividend Aristocrat the Risk Is Already Priced In.”” At that time, Cardinal Health Inc (NYSE:CAH) was trading at approximately $56 per share and was paying a dividend of $1.81 representing a dividend yield of about 3.1%. Essentially we check that a) the company does not have too much debt, and b) that it can afford to pay the interest. Instantly create graphs of essential fundamental data. We use cookies for a number of reasons, such as keeping our website reliable and secure, personalising content and ads, providing social media features and to analyse how our website are used. }, Helping You Make The Most Of Your Money – Invest Smarter with Dividend. Number two, I think it’s important to mention that the 2 ½ year holding period is approximately half of what I would consider an appropriate holding period of 5 years or more. during this crisis. Stocks to Buy Now: Cardinal Health . Both product segments reported revenue growth for the quarter, although Cardinal Health’s segment profit declined last quarter. www.moneyinvestexpert.com Copyright 2011-2020, Dividend Aristocrat Cardinal Health Inc.…. Simply Wall St has no position in any stocks mentioned. We aim to bring you long-term focused analysis driven by fundamental data. Cardinal Health has EBIT of 7.47 times its interest expense, which we think is adequate. ['Element', 'Total Return (CAGR) (%)', {role: 'style'} ], Business Analysis The investment thesis for Cardinal Health hinges on a fast-aging population driving higher U.S healthcare spending, especially on pharmaceuticals and medical supplies, over the coming decade and beyond. since November 2017 as seen in the above graph. stock price more than it deserves. Of course That said, if the company can return to positive earnings growth, it could justify a higher valuation. Dividend Yield: 4.02%. Opioid suits are an ongoing concern that needs to be watched. Nevertheless, we are halfway to what I would consider a minimum holding period, and it will be interesting to see how this recommendation ultimately pans out. As detailed above, Cardinal Health operates in two segments: pharmaceutical and medical. While the pace of dividend growth has slowed, the starting yield is solid. While the pace of dividend growth has slowed, the starting yield is solid. International Dividend Portfolio dropped -1.17% after +5.76% last month, Dividend Retirement Portfolio -0.89% in September, European Dividend Aristocrats Performance: September 2020, Dividend Kings Performance September 2020. Power Outages Increase Political Scrutiny of Con Edison But Dividend Profile Remains Stable. Dividend investors should always want to know if a) a company’s dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing.
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