4-Star Stocks Poised to Pop: Cardinal Health

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical supplies distributor Cardinal Health (NYSE: CAH) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Cardinal's business and see what CAPS investors are saying about the stock right now.

Cardinal facts

Headquarters (Founded)

Dublin, Ohio (1979)

Market Cap

$10 billion

Industry

Health-care distributors

Trailing-12-Month Revenue

$99.5 billion

Management

CEO George Barrett (since September 2009)
CFO Jeffrey Henderson (since May 2005)

Return on Equity (Average, Past 3 Years)

13.8%

Cash/Debt

$1.85 billion/$3.64 billion

Dividend Yield

2.5%

Competitors

McKesson (NYSE: MCK)
AmerisourceBergen (NYSE: ABC)

CAPS Members Bullish on CAH Also Bullish on

Johnson & Johnson (NYSE: JNJ)
Microsoft (Nasdaq: MSFT)

CAPS Members Bearish on CAH Also Bearish on

Akamai (Nasdaq: AKAM)
Apple (Nasdaq: AAPL)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 92.2% of the 410 members who have rated Cardinal believe the stock will outperform the S&P 500 going forward. These bulls include chitownjester and 2Cores.

Last week, chitownjester applauded Cardinal's recent move to cut the fat:

Spinoff of [CareFusion] will unlock value. Passage of healthcare legislation will lift uncertainty from the sector. Cash machine.

In a pitch from one week earlier, 2Cores mercifully forgives the company for its Cardinal sins:

Can we get back to work, now? This is a great company whose stock price is depressed due to bruises earned kicking out some baddies that were running the show into the ground. They just spun off some elements of the company that weren't consistently profitable to smooth out the ride for retirees like myself. I held [Cardinal] stock years ago and it seemed to stall out but I'm back for another ride up. I think it will double in a couple of years and pay more than a CD in dividends while we're getting there. Health Care Reform money will definitely help.

What do you think about Cardinal, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. McKesson and Apple are Motley Fool Stock Advisor selections. Akamai is a recommendation of Rule Breakers, Johnson & Johnson is an Income Investor pick, and Microsoft is a choice of Inside Value. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 22, 2009, at 11:42 AM, foomail123 wrote:

    Re: above article last paragraph: "This is a great company whose stock price is depressed due to bruises earned kicking out some baddies that were running the show into the ground."

    Question: Isn't above true for Lehman, AIG, Montgomery ward, Enron and others - "baddies running the show into the ground ". ?

    People are paid with golden parachutes and exit strategies for this. Why do you want to pay from your earnings for the Executive's retirement ?

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DocumentId: 989603, ~/Articles/ArticleHandler.aspx, 12/1/2009 10:00:04 PM

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