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Cardinal Health Inc. (CAH) Stock

Cardinal Health Inc. Stock Details, Movements and Public Alerts

Cardinal Health (CAH): The $50B Medical Supply Chain Backbone Delivering 3.5% Dividend Yield

Every day, Cardinal Health delivers the medications and medical supplies that keep the U.S. healthcare system functioning. As one of three dominant pharmaceutical wholesalers (alongside McKesson and AmerisourceBergen), Cardinal Health under CEO Jason Hollar distributes $200+ billion in pharmaceuticals and medical products annually—roughly $1 of every $12 spent on U.S. healthcare flows through Cardinal's warehouses. The company's Pharmaceutical segment delivers drugs from manufacturers to pharmacies (CVS, Walgreens, independent chains), earning thin 0.5-1% margins on massive volumes. The Medical segment supplies hospitals with surgical gloves, gowns, syringes, and specialty products, generating higher 5-7% margins. While not a high-growth story, Cardinal Health offers defensive characteristics—healthcare consumption is non-cyclical, and Cardinal's infrastructure role makes it indispensable. The stock trades at 16x forward earnings with a 3.5% dividend yield, appealing to income investors seeking stable cash flows backed by essential healthcare services.

52-Week Range

$167.89 - $105.59

-2.04% from high · +55.76% from low

Avg Daily Volume

32,329

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

23.82

Near market average

Forward P/E

16.42

Earnings expected to grow

PEG Ratio

1.58

Reasonably valued

Price to Book

16.07

EV/EBITDA

13.26

EPS (TTM)

$6.49

Price to Sales

0.17

Beta

0.74

Less volatile than market

How is CAH valued relative to its earnings and growth?
Cardinal Health Inc. trades at a P/E ratio of 23.82, which is near the market average of approximately 20, suggesting the market views it as fairly valued relative to its earnings. Looking ahead, the forward P/E of 16.42 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 1.58 indicates reasonable value when growth is considered.
What is CAH's risk profile compared to the market?
With a beta of 0.74, Cardinal Health Inc. is less volatile than the overall market. This means when the market moves up or down by 10%, this stock typically moves less than 10% in the same direction. Lower beta stocks are often preferred by conservative investors seeking stability. The price-to-book ratio of 16.07 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

0.70%

Operating Margin

1.05%

EBITDA

$3.27B

Return on Equity

0.00%

Return on Assets

3.16%

Revenue Growth (YoY)

0.50%

Earnings Growth (YoY)

4.00%

How profitable and efficient is CAH's business model?
Cardinal Health Inc. achieves a profit margin of 0.70%, meaning it retains $0.70 from every $100 in revenue after all expenses. This relatively low margin suggests the company operates in a competitive environment or high-cost industry where profitability is challenging. The operating margin of 1.05% reveals how efficiently the company runs its core business operations before interest and taxes.0
What are CAH's recent growth trends?
Cardinal Health Inc.'s revenue grew by 0.50% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 4.00% year-over-year, outpacing revenue growth through improved margins. These growth metrics should be evaluated against MEDICAL DISTRIBUTION industry averages for proper context.

Dividend Information

Dividend Per Share

$2.03

Dividend Yield

1.32%

Ex-Dividend Date

Oct 1, 2025

Dividend Date

Oct 15, 2025

What dividend income can investors expect from CAH?
Cardinal Health Inc. offers a dividend yield of 1.32%, paying $2.03 per share annually. This modest yield below 2% suggests the company prioritizes growth investments over current income. While the dividend provides some return, investors are likely attracted more by capital appreciation potential than income generation. To receive the next dividend, shares must be purchased before the ex-dividend date of Oct 1, 2025.
How reliable is CAH's dividend for long-term investors?
The dividend sustainability can be assessed through the payout ratio - Cardinal Health Inc. pays $2.03 per share in dividends against earnings of $6.49 per share, resulting in a payout ratio of 31.25%. This balanced payout between 30-60% suggests a sustainable dividend policy that allows both shareholder returns and business reinvestment. The dividend appears well-covered by earnings. The next dividend payment is scheduled for Oct 15, 2025.

Company Size & Market

Market Cap

$36.7B

Revenue (TTM)

$222.58B

Revenue/Share (TTM)

$923.56

Shares Outstanding

237.58M

Book Value/Share

-$11.64

Asset Type

Common Stock

What is CAH's market capitalization and position?
Cardinal Health Inc. has a market capitalization of $36.7B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 237.58M shares outstanding, the company's ownership is relatively concentrated. As a participant in the MEDICAL DISTRIBUTION industry, it competes with other firms in this sector.
How does CAH's price compare to its book value?
Cardinal Health Inc.'s book value per share is -$11.64, while the current stock price is $164.47, resulting in a price-to-book (P/B) ratio of -14.13. Trading below book value can indicate the market perceives challenges ahead, or it might represent a value opportunity if the assets are quality and earnings can recover. Value investors often screen for P/B ratios below 1.0. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$180.79

9.92% upside potential

Analyst Recommendations

Strong Buy

1

Buy

10

Hold

5

Sell

0

Strong Sell

0

How reliable are analyst predictions for CAH?
16 analysts cover CAH with 69% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The mixed views reflect uncertainty about the outlook. The consensus target of $180.79 implies 9.9% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on CAH?
Current analyst recommendations:1 Strong Buy, 10 Buy, 5 Hold, 00The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Oct 1, 2025, 05:45 AM

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Cardinal Health (CAH) Stock Analysis 2025: Complete Investment Guide

The Invisible Infrastructure Behind Every Hospital and Pharmacy

When a patient picks up a prescription at CVS or undergoes surgery at a hospital, Cardinal Health's logistics network made it possible. Founded in 1971 as Cardinal Foods, the company pivoted to pharmaceutical distribution in the 1980s and grew through acquisitions into a $230 billion revenue giant. Jason Hollar, who became CEO in 2022 after CFO tenure, oversees two segments: Pharmaceutical Distribution (85% of revenue, 1% margins) and Medical Products & Services (15% of revenue, 6-7% margins). The pharma business is a scale game—Cardinal negotiates rebates from drug manufacturers, warehouses inventory across 50+ distribution centers, and delivers to pharmacies within 24 hours. The medical segment supplies Cardinal Health-branded gloves, gowns, surgical kits, and specialty products (surgical robotics, wound care) to hospitals and surgery centers. While margins are thin, volumes are enormous: Cardinal handles 7 billion prescription fills annually, generating $3-4 billion in gross profit on $230B in throughput.

Business Model & Competitive Moat

Cardinal Health's moat stems from scale economies and switching costs. Pharmaceutical distribution requires massive capital (warehouses, IT systems, transportation fleets) that create barriers to entry. Only three companies—Cardinal Health, McKesson, and AmerisourceBergen—have national scale, collectively controlling 90%+ of the U.S. market. Pharmacies face high switching costs: changing distributors requires re-credentialing, IT integration, and potential supply disruptions. However, this moat is narrow—the business is commoditized, with customers (pharmacy chains, hospital GPOs) negotiating aggressively on price. Cardinal earns 0.5-1% margins on pharma distribution, meaning a $100B revenue segment generates just $500M-1B in operating income. The medical segment offers better economics: Cardinal's own-brand gloves, gowns, and surgical supplies capture 5-7% margins, and hospital relationships create stickiness. Jason Hollar's strategy focuses on medical segment growth (8% annually) and specialty pharma (oncology, rare disease drugs with higher margins) to improve mix and profitability.

Financial Performance

  • •Revenue: $230 billion (2024), up 5% YoY driven by specialty pharma and medical segment growth
  • •Operating Income: $2.8B (1.2% margin)—low margin but reliable, recession-resistant cash flows
  • •Net Income: $1.7B, P/E of 23.8x (current), forward P/E of 16.4x
  • •Free Cash Flow: $2.2B (strong cash generation despite low margins)
  • •Dividend: $2.06 per share annually (3.5% yield), 35+ years of consecutive increases
  • •Debt: $6B net debt (manageable 2.1x EBITDA); investment-grade credit rating

Growth Catalysts

  • •GLP-1 Drug Boom: Distributing Ozempic, Wegovy, Mounjaro adds $1-2B in pharma throughput (0.5-1% margin = $10-20M annual profit)
  • •Medical Segment Expansion: At-home healthcare, surgical robotics, and specialty products growing 8-10% annually
  • •Specialty Pharma Mix Shift: Oncology, rare disease drugs carry 2-3% margins vs. 0.5% for generics—mix shift adds 10-20bps margin annually
  • •Nuclear Pharmacy Acquisitions: Cardinal acquired Synergy Health nuclear pharmacies; radiopharmaceuticals is a $5B growing niche
  • •At-Home Care: Post-acute care and home health trends driving demand for at-home medical supplies (Cardinal-branded kits)

Risks & Challenges

  • •Opioid Litigation: $6B+ settlement with states over opioid distribution; ongoing monitoring costs $100M+ annually
  • •Amazon/Walmart Threat: E-commerce giants entering pharma distribution (Amazon Pharmacy, Walmart Health) could disrupt
  • •Pricing Pressure: PBMs (CVS Caremark, Express Scripts) negotiate aggressively; margin compression ongoing threat
  • •Generic Drug Deflation: Generic drug prices down 5-10% annually; offsets volume growth
  • •Supply Chain Shocks: COVID-era PPE shortages exposed supply vulnerabilities; concentration in China-sourced products
  • •Vertical Integration: CVS (own wholesale), Walgreens (partnership with AmerisourceBergen) reducing third-party distribution needs

Competitive Landscape

CompanyMarket ShareRevenueKey Differentiator
McKesson (MCK)35-40%$310BScale + Canada presence
Cardinal Health (CAH)25-30%$230BMedical segment balance
AmerisourceBergen (ABC)20-25%$260BSpecialty pharma focus
Amazon Pharmacy<2%$10B est.E-commerce convenience

Cardinal Health sits in the middle of the big three wholesalers—smaller than McKesson but more diversified than AmerisourceBergen. Jason Hollar's strategy leans into medical products where margins are higher and competition less commoditized. The risk: Amazon's entry could disrupt direct-to-consumer pharma, though institutional/hospital distribution remains defensible.

Who Is This Stock Suitable For?

Perfect For

  • ✓Income investors seeking 3.5% dividend yield with growth (potential Dividend Aristocrat)
  • ✓Defensive/recession-resistant allocations (healthcare non-cyclical)
  • ✓Value investors buying essential infrastructure at reasonable 16x forward P/E
  • ✓Portfolio diversification—low correlation to tech/cyclicals

Less Suitable For

  • ✗Growth investors (5% revenue growth, low margin expansion potential)
  • ✗High-yield seekers (3.5% below REIT/BDC alternatives)
  • ✗ESG investors (opioid litigation overhang, fossil fuel logistics)
  • ✗Momentum traders (low beta, low volatility stock)

Investment Thesis

Cardinal Health offers a classic defensive investment profile: essential healthcare infrastructure generating steady cash flows with a growing dividend. At 16x forward earnings, the stock trades at a modest premium to historical averages (10-12x), reflecting quality recognition and dividend reliability. The investment case rests on three pillars: first, recession-resistant earnings—people need medications regardless of economic conditions. Second, dividend growth—Cardinal's 35+ year streak of increases positions it for eventual S&P Dividend Aristocrat inclusion. Third, medical segment upside—at-home care, surgical robotics, and nuclear pharmacy offer 8-10% growth with better margins than pharma distribution. Risks are real: Amazon disruption, opioid legacy costs, and generic drug deflation constrain upside. However, for income-focused investors seeking 5-7% total returns (3.5% yield + 2-4% dividend growth), Cardinal Health provides defensive exposure to unavoidable healthcare spending. This is not a stock to double your money—it's a stock to sleep well at night while collecting dividends.

Conclusion

Cardinal Health is a high-quality income stock suitable for 5-10% allocations in defensive, dividend-focused portfolios. The stock merits a BUY for investors seeking 5-7% annual total returns (3.5% yield + 2-4% capital appreciation) with below-market volatility. Not suitable for growth mandates or aggressive capital appreciation goals. Recommended action: BUY for income investors, accumulate on weakness below $100. This is a core holding for retirees and conservative investors prioritizing dividend safety and healthcare sector exposure. Hold through market volatility and reinvest dividends for compounding over 10+ year horizons.
Bull Case
$140 (30% upside) - Medical segment accelerates, specialty pharma margins expand, dividend aristocrat inclusion drives re-rating
Base Case
$115 (7% upside) - Mid-single-digit revenue growth, gradual margin improvement, steady dividend increases
Bear Case
$85 (21% downside) - Amazon disruption accelerates, generic deflation intensifies, opioid costs surge

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