December 12, 2024
Top 10 Stock Cardinal Health Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Cardinal Health – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Cardinal Health is listed as a top 10 stock on December 12, 2024 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for Cardinal Health on December 12, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Distributors |
| Index | Dividends USA, Diversity USA, Recycling, D.J. US Health Care, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Cardinal Health Strong Buy
| 360 METRICS | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 96 |
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ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Cardinal Health are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Cardinal Health. The consolidated Value Rank has an attractive rank of 99, which means that the share price of Cardinal Health is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 99% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. But the company’s financing is risky with a Safety rank of 20. This means 80% of comparable companies have a safer financing structure than Cardinal Health. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, Cardinal Health is better positioned than 96% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 99), above-average growth (Growth Rank of 61), and positive market sentiment in the professional investor community (Sentiment Rank of 85), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 20), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Cardinal Health is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Cardinal Health very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Cardinal Health is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cardinal Health. Analyst Opinions are at a rank of 37 (worse than 63% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 78, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Cardinal Health. Even better, the Professional Investors rank is 79, meaning that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 80, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 80% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Cardinal Health has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Cardinal Health Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 99 (better than 99% compared with alternatives) for 2024, Cardinal Health shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Cardinal Health. Price-to-Sales is 93 which means that the stock price compared with what market professionals expect for future sales is lower than for 93% of comparable companies, indicating a good value for Cardinal Health's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 60% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 90. Compared with other companies in the same industry, dividend yields of Cardinal Health are expected to be higher than for 93% of all competitors (a Dividend Yield rank of 93). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 99, is a buy recommendation based on Cardinal Health's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Cardinal Health based on its detailed value metrics.
Growth Strategy: Cardinal Health Growth Momentum good
| GROWTH METRICS | December 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 63 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 34 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 63 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 57 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 61 |
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ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Cardinal Health shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Cardinal Health. Sales Growth has a rank of 63 which means that currently, professionals expect the company to grow more than 63% of its competitors. Capital Growth is also above 34% of competitors with a rank of 63, and Stock Returns with the rank of 57 is also an outperformance. Only Profit Growth is low with a rank of 34 which means that currently, professionals expect the company to grow its profits less than 66% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Cardinal Health is a good growth stock. ...read more
Safety Strategy: Cardinal Health Debt Financing Safety risky
| SAFETY METRICS | December 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 8 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 91 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Cardinal Health has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Cardinal Health is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cardinal Health. Liquidity is at 91, meaning the company generates more profit to service its debt than 91% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 8, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 92% of its competitors. Leverage is also high at a rank of 1, which means that the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Cardinal Health has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Cardinal Health Top Financial Performance
| COMBINED PERFORMANCE | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 91 |
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| COMBINED | ||||||||
| COMBINED | 84 |
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ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Cardinal Health (Health Care Distributors, USA) shares have much better financial characteristics than comparable stocks. Shares of Cardinal Health are a good value (attractively priced) with a consolidated Value Rank of 99 (better than 99% of alternatives), show above-average growth (Growth Rank of 61) but are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Cardinal Health's financial characteristics. As the company Cardinal Health's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 99) and above-average growth (Obermatt Growth Rank of 61), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 20) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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