Those who invested in Cardinal Health (NYSE:CAH) three years ago are up 80%

By buying an index fund, you can easily closely match the market returns. However, many of us dare to dream big returns and build our own portfolios. for example, Cardinal Health Co., Ltd. (New York Stock Exchange: Canada) stock has risen 62% over the past three years, clearly outperforming the market return of about 40% (not including dividends).

With that in mind, it’s worth checking to see if the company’s underlying fundamentals are driving its long-term performance, or if there are any discrepancies.

See the latest analysis on Cardinal Health

SWOT Analysis for Cardinal Health


  • Liabilities are well covered by earnings and cash flow.

  • Dividends are low compared to the top 25% of dividend payers in the healthcare market.

  • Annual revenue is expected to grow at a faster pace than the US market.
  • Transactions that are 20% or more below our estimated fair value.

  • With total liabilities exceeding total assets, the risk of financial collapse has increased.
  • Dividends are not included in earnings.
  • Annual revenue is expected to grow more slowly than the US market.

To paraphrase Benjamin Graham, the market is a voting machine in the short term, but a weighing machine in the long term. One way he looks at how market sentiment has changed over time is to look at the interaction between a company’s stock price and his earnings per share (EPS).

Cardinal Health has been profitable over the past three years. This is generally considered positive, so stock prices are expected to rise.

Here’s how the EPS changed over time (click the image to see the exact values).

NYSE: CAH Earnings Per Share Growth May 15, 2023

Perhaps it’s worth noting that CEO salaries are lower than the median for companies of similar size. While it’s always worth keeping an eye on CEO compensation, the more important question is whether the company will grow revenue over the years. Check out this interactive chart from Cardinal Health to dig deeper into your earnings. profit, revenue, cash flow.

what about dividends?

Investors should not only measure stock return, but also consider total shareholder return (TSR). TSR incorporates the value of spin-offs or discounted capital raising along with dividends, based on the assumption that dividends are reinvested. Arguably, the TSR provides a more comprehensive picture of the returns provided by equities. Cardinal Health has a TSR of 80% over the last three years. This outweighs the stock return mentioned earlier. And speculating that dividend payouts would be the main explanation for the divergence leaves no room for praise.

different point of view

We are pleased to report that Cardinal Health has delivered a 56% gross shareholder return to shareholders over the last 12 months. Including dividends, of course. This growth rate is better than the 5-year annual TSR (14%). Therefore, the sentiment around the company seems to be positive recently. In the best-case scenario, this could indicate real business momentum and that now may be the perfect time to dig deeper. While it is well worth considering the various effects market conditions can have on stock prices, there are other factors that are more important. For that, you need to know: four warning signs Discovered by Cardinal Health .

if you were like me, you would no i want to miss this free A list of growth companies that insiders are buying.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on American exchanges.

Valuation is complicated, but we’re here to help make it simple.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst projections using only unbiased methodologies and articles are not intended as financial advice. This is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on underlying data. Please note that our analysis may not take into account the latest announcements or qualitative material from price-sensitive companies. Simply Wall St does not have any positions in any of the securities mentioned.

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