Cardinal Health (CAH) Stock Analysis

 Cardinal Health Dividend

The Cardinal Health dividend has been paid every year since 1983 and increased for 28 consecutive years; qualifying the company as a Dividend Aristocrat and Dividend Champion. 

Current Dividend Annualized: $2.02

Cardinal Health (CAH) Intrinsic Value – Margin of Safety Analysis            

(updated February 2025)

Normalized Diluted EPS (TTM):  $5.37
Free Cash Flow Per Share (TTM):   -$1.99
Cash Flow From Operations (CFO) Per Share (TTM)): $0.03

Estimated Intrinsic Value: $75

Target Buy Price Based on Required Margin of Safety =  $54
(Required Margin of Safety Based On Risk Stability Grade:

A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)

Target SELL Price Based on Estimated Intrinsic Value = $86
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)

Risk / Stability Grade: C

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade: B+

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Business Quality Grade:  C-

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report: 12/31/24

AAAMP Portfolios Position Disclosures:
Treasure Trove Dividend (TTD – None
Global Dividend Value (GDV) –  None
Dividend Growth & Income (DGI) –  None
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global Conservative Income (GCI) – None 
Global High Income (GHI) – None

Company Description

Sector: Health Care
Industry: Medical Distribution

Company Overview:
Cardinal Health (CAH) is a major healthcare services and distribution company, supplying pharmaceuticals, medical products, and solutions to hospitals, pharmacies, and healthcare providers. It operates through two main segments: Pharmaceutical Distribution, which delivers branded and generic drugs, and Medical Segment, which provides surgical supplies, laboratory products, and medical equipment. The company plays a critical role in the healthcare supply chain, ensuring the efficient delivery of essential products.

Company Strengths:
Cardinal Health benefits from its vast distribution network and strong market position as one of the largest pharmaceutical and medical product distributors in the U.S. Its long-term relationships with healthcare providers and manufacturers provide stable revenue streams. Additionally, the company has a diversified portfolio, allowing it to leverage growth in both pharmaceuticals and medical supply markets.

Company Challenges:
Cardinal Health faces ongoing pressure from rising pharmaceutical pricing regulations and reimbursement rate challenges, which can impact profitability. The company has also dealt with legal risks, including opioid litigation settlements, which have weighed on financial performance. Furthermore, supply chain disruptions and cost inflation pose additional hurdles, requiring continuous operational efficiency improvements.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.