Cardinal Health vs McKesson Which Is More Attractive?

Cardinal Health and McKesson are two of the largest healthcare services and pharmaceutical distribution companies in the United States. Both companies have been key players in the industry for many years and have performed well in terms of revenue growth and profitability. However, their stock performances have varied in recent years due to different market conditions and company-specific factors. Understanding the similarities and differences between Cardinal Health and McKesson stocks can provide valuable insights for investors looking to make informed decisions in the healthcare sector.

Cardinal Health or McKesson?

When comparing Cardinal Health and McKesson, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Cardinal Health and McKesson.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Cardinal Health has a dividend yield of 1.66%, while McKesson has a dividend yield of 0.45%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cardinal Health reports a 5-year dividend growth of 1.10% year and a payout ratio of 39.27%. On the other hand, McKesson reports a 5-year dividend growth of 9.71% year and a payout ratio of 12.89%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Cardinal Health P/E ratio at 23.39 and McKesson's P/E ratio at 30.04. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Cardinal Health P/B ratio is -9.02 while McKesson's P/B ratio is -25.25.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Cardinal Health has seen a 5-year revenue growth of 0.80%, while McKesson's is 0.96%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cardinal Health's ROE at -38.26% and McKesson's ROE at -115.33%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $119.73 for Cardinal Health and $584.52 for McKesson. Over the past year, Cardinal Health's prices ranged from $93.17 to $126.23, with a yearly change of 35.48%. McKesson's prices fluctuated between $431.35 and $637.51, with a yearly change of 47.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.