Does Cardinal Health Inc (NYSE:CAH) Have A Place In Your Portfolio?
Over the past 10 years Cardinal Health Inc (NYSE:CAH) has returned an average of 2.00% per year from dividend payouts. The stock currently pays out a dividend yield of 3.62%, and has a market cap of US$16.35B. Does Cardinal Health tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Cardinal Health
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does Cardinal Health pass our checks?
The company currently pays out 34.24% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect CAH’s payout to remain around the same level at 33.97% of its earnings, which leads to a dividend yield of around 3.72%. In addition to this, EPS is forecasted to fall to $3.86 in the upcoming year. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. CAH has increased its DPS from $0.56 to $1.91 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Cardinal Health produces a yield of 3.62%, which is high for Healthcare stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Cardinal Health ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CAH’s future growth? Take a look at our free research report of analyst consensus for CAH’s outlook.
Valuation: What is CAH worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CAH is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
