Cardinal Health Inc (NYSE: CAH)

Sector: Healthcare Industry: Medical Distribution CIK: 0000721371
Market Cap 80.96 Bn
P/B 15.49
P/E 103.48
P/S 0.82
ROIC (Qtr) 31.46
Div Yield % 0.52
Rev 1y % (Qtr) 18.75
Total Debt (Qtr) 9.03 Bn
Debt/Equity (Qtr) -3.13
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About

Investment thesis

Bull case

  • Strong operating cash flow of 6.10B provides robust 0.68x coverage of total debt 9.03B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.78B provide 4.08x coverage of short-term debt 680M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 44.10B provides 4.89x coverage of total debt 9.03B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 6.10B provides exceptional 435.93x coverage of minority interest expenses 14M, showing strong core operations.
  • Operating cash flow of 6.10B provides exceptional 19.31x coverage of interest expenses 316M, showing strong debt service capability.

Bear case

  • Operating cash flow of 6.10B barely covers its investment activities of (6.65B), with a coverage ratio of -0.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 2.78B against inventory of 20.12B, the 0.14 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 6.10B provides thin coverage of dividend payments of (495M) with a -12.33 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 2.78B provide limited coverage of acquisition spending of (6.10B), which is -0.46x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 2.58B show weak coverage of depreciation charges of 883M, with a 2.92 ratio indicating high capital intensity and potential reinvestment needs.

Operating and Reportable Segment Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Medical Distribution
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCK Mckesson Corp 117.90 Bn 27.17 0.30 8.62 Bn
2 CAH Cardinal Health Inc 80.96 Bn 103.48 0.82 9.03 Bn
3 COR Cencora, Inc. 79.51 Bn 93.02 0.52 7.92 Bn
4 HSIC Henry Schein Inc 9.46 Bn 24.20 0.73 3.44 Bn
5 AHG Akso Health Group 0.37 Bn -2.71 24.79 0.00 Bn
6 EDAP Edap Tms Sa 0.17 Bn -7.47 2.30 0.01 Bn
7 QIPT Quipt Home Medical Corp. 0.17 Bn -15.61 0.63 0.11 Bn
8 EMPG Empro Group Inc. 0.12 Bn 157.82 21.62 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.41 1.06
EV to Cash from Ops. EV/CFO 38.18 13.08
EV to Debt EV to Debt 9.07 282.28
EV to EBIT EV/EBIT 54.75 6.31
EV to EBITDA EV/EBITDA 52.69 12.22
EV to Free Cash Flow [EV/FCF] EV/FCF 43.05 15.66
EV to Market Cap EV to Market Cap 1.01 1.21
EV to Revenue EV/Rev 0.83 1.87
Price to Book Value [P/B] P/B 15.49 11.46
Price to Earnings [P/E] P/E 103.48 34.37
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.36 2.22
Dividend Payout Ratio % Div Payout % (Qtr) 29.10 5.88
Dividend per Basic Share Div per Share (Qtr) 2.04 0.67
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 8.69 2.23
Interest Coverage Int. cover (Qtr) 8.16 60.87
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -14.11 -12,260.13
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -27.11 27.05
Dividend Growth (1y) % Div 1y % (Qtr) 1.09 2.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 36.41 -177.28
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 32.37 368.76
EBIT Growth (1y) % EBIT 1y % (Qtr) 36.60 -206.06
EBT Growth (1y) % EBT 1y % (Qtr) 26.85 -173.08
EPS Growth (1y) % EPS 1y % (Qtr) 29.44 -21.54
FCF Growth (1y) % FCF 1y % (Qtr) 1,244.01 -218.00
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.03 15.84
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 4.21 1.93
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.06
Cash Ratio Cash Ratio (Qtr) 0.06 0.22
Current Ratio Curr Ratio (Qtr) 0.91 1.54
Debt to Equity Ratio Debt/Equity (Qtr) -3.13 -0.33
Interest Cover Ratio Int Coverage (Qtr) 8.16 60.87
Times Interest Earned Times Interest Earned (Qtr) 8.16 60.87
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 1.40 -94.80
EBIT Margin % EBIT Margin % (Qtr) 1.05 -102.39
EBT Margin % EBT Margin % (Qtr) 0.92 -105.05
Gross Margin % Gross Margin % (Qtr) 3.70 23.37
Net Profit Margin % Net Margin % (Qtr) 0.70 -86.72