In a market where value is scarce, NYSE:CAH offers a refreshing opportunity with its solid fundamentals.

Last update: Jun 4, 2024

Our stock screening tool has pinpointed CARDINAL HEALTH INC (NYSE:CAH) as an undervalued stock option. NYSE:CAH retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Assessing Valuation Metrics for NYSE:CAH

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:CAH boasts a 7 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of CAH indicates a rather cheap valuation: CAH is cheaper than 88.60% of the companies listed in the same industry.
CAH's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.88.
82.46% of the companies in the same industry are more expensive than CAH, based on the Price/Forward Earnings ratio.
CAH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 19.97.
Based on the Enterprise Value to EBITDA ratio, CAH is valued cheaper than 82.46% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CAH is valued cheaply inside the industry as 88.60% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as CAH's earnings are expected to grow with 13.28% in the coming years.

Analyzing Profitability Metrics

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:CAH, the assigned 5 is a significant indicator of profitability:

CAH's Return On Assets of 1.20% is fine compared to the rest of the industry. CAH outperforms 64.04% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.31%, CAH belongs to the top of the industry, outperforming 95.61% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CAH is above the industry average of 8.76%.
The 3 year average ROIC (10.97%) for CAH is below the current ROIC(17.31%), indicating increased profibility in the last year.
CAH's Profit Margin of 0.25% is fine compared to the rest of the industry. CAH outperforms 60.53% of its industry peers.

Health Assessment of NYSE:CAH

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:CAH has earned a 5 out of 10:

An Altman-Z score of 5.23 indicates that CAH is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.23, CAH belongs to the best of the industry, outperforming 88.60% of the companies in the same industry.
The Debt to FCF ratio of CAH is 2.92, which is a good value as it means it would take CAH, 2.92 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.92, CAH belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.

How We Gauge Growth for NYSE:CAH

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:CAH has earned a 6 for growth:

CAH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.22%, which is quite impressive.
Looking at the last year, CAH shows a quite strong growth in Revenue. The Revenue has grown by 11.03% in the last year.
The Revenue has been growing by 8.43% on average over the past years. This is quite good.
CAH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.75% yearly.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of CAH

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.