Cardinal Health Maybe A Buy The Past Year Pullback

This week I'm seeking a prestigious and long-term dividend-paying stock from the healthcare business sector. 

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

Today I'm reviewing a large-cap medical distribution firm, named Cardinal Health, Inc. It's trading ticker symbol is CAH

Cardinal Health Inc. is a healthcare services company. It provides services and products for hospital systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices

The company operates through two segments, Pharmaceutical and Medical. 

The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. It also provides services to support the development, marketing, and distribution of specialty pharmaceutical products. 

The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products. It also distributes a range of national brand products; and medical products to patients' homes, as well as provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers.

Cardinal Health, Inc. was founded in 1979 and is headquartered in Dublin, Ohio.

I use three key data points to gauge the value of any dividend equity or fund like Cardinal Health, Inc. (CAH): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

CAH Price

West's price per share was $52.64 at yesterday's market close. A year ago its price was $64.96 for a price pullback of $12.32  per share for the year.  

Assuming Cardinal's price will trade in the range of $48 to $72 next year, Cardinal's recent $52.64 price could recover the $12.00 soon and get back to $64.00 by mid-October, 2019. 

CAH Dividends

Cardinal's most recent quarterly dividend was $0.4763 declared August  8th and paid on October 15th. 

At this most recent $0.4763 quarterly rate, Cardinal's annual dividend equals $1.90 yielding 3.62% at yesterday's closing $52.64 price.

Gains For CAH?

Adding the $1.90 estimated annual dividend to my estimated $12.00 annual price upside for Cardinal (CAH) makes a $13.90  potential gross annual per share gain, which will be reduced by the costs to trade the shares.  

A little over $1,000.00 invested today at the $52.64 recent price buys 19 Cardinal Health, Inc. (CAH) shares. 

A $10 broker fee paid half at purchase and half at sale costs $0.53 per share, subtracting that $0.53 brokerage cost from the estimated $13.90 gross annual gain leaves a net gain of $13.37 X 19 shares = $254.03 or a 25% net gain on a $1,000.16 investment.

Therefore, Cardinal Health, Inc., whose trading ticker symbol is CAH, now shows a possible 25% net gain including a 3.62% dividend yield. 

Nineteen brokers cover this stock:

Three brokers say CAH is a "buy".

One broker says CAH will "outperform" its peers.

Thirteen brokers say CAH is a "hold".

One broker says WST will "underperform" its peers and...

One broker says "Sell" CAH!

Thus, the consensus recommendation number available is 2.79, or 'hold'

The median price target set by the nineteen brokers is $7.00 under my estimated $64 price target.

So, you could look at these few speculative numbers this way, Cardinal Health, Inc., whose trading ticker symbol is CAH, has made money, is making money, and could net a 10% to 25% net annual gain including a 3.62% dividend yield. It could be more, it could be less. 

The above speculation is based on past year performance. Cardinal Health, Inc. (CAH) is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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Bhavya Sree 5 years ago Member's comment

The Pharmaceutical and Medical sectors are ever expanding fields where there are lots of options to choose from. It may be a challenge to identify a credible destination with transparency and trust.

#CardinalHealth Inc. is one of those whose primary concern is to build trust and be transparent. Thanks to Fredrik Arnold for his insight on the key points which are price, Dividends and Returns. $CAH