McKesson (MCK 0.25%) stood out as one of the bright spots in a dismal stock market last year. Shares of the pharmaceutical distributor and health information technology company soared 51%.

But that was then. McKesson is underperforming the overall market so far in 2023. Is the stock still a good pick for investors? There are different opinions. Motley Fool contributors Adria Cimino and Keith Speights make the bull and bear cases for McKesson stock.

The bull case

(Adria Cimino): McKesson offers investors the safety of healthcare -- without one of the industry's biggest risks. That risk is the failure of a potential product in development. This is because McKesson doesn't develop drugs or devices. Instead, McKesson distributes medical products and offers a variety of services to healthcare facilities, companies, and doctors.

This has proved to be a winning business. The company has a strong track record of revenue growth. And McKesson recently raised its fiscal 2023 adjusted earnings per diluted share forecast to the range of $25.75 to $26.15 from an earlier forecast of $24.45 to $24.95.

MCK Revenue (Annual) Chart

MCK Revenue (Annual) data by YCharts

Looking ahead, McKesson may be about to enter a new phase of growth that will benefit revenue, net income, and return on invested capital. The company recently divested 11 of its 12 European businesses as part of a strategy to focus on areas with the best growth potential.

So, McKesson has turned its attention to strengthening its position in oncology and biopharma services. The company said the oncology market alone is worth more than $50 billion. McKesson offers platforms to oncology practices to manage patient data, handle compliance issues and more. The company last year joined forces with HCA Healthcare's Sarah Cannon Research Institute to increase patient and doctor access to clinical trials.

As for biopharma services, McKesson in recent years made acquisitions that now give it a broad portfolio. In the most recent move, the company bought Rx Savings Solutions -- this business helps employers and health plans cut prescription drug costs.

McKesson also is known for rewarding shareholders. The company in the first nine months of the fiscal year completed $3.5 billion in stock buybacks and paid out $216 million in dividends . McKesson's valuation of 13 times forward earnings estimates is higher than the level of about 8 a couple of years ago -- but growth prospects make today's price look very reasonable.

The bear case  

Keith Speights: Let me first say up front that there's a lot to like about McKesson. The positives laid out in the bull case above are real. However, there can be cracks in even strong suits of armor. McKesson has a few of them.

Perhaps most importantly, McKesson's growth isn't all that impressive. The company's revenue in its most recent quarter increased by only 3% year over year. Adjusted earnings rose by the same percentage. Sure, McKesson was able to boost its adjusted earnings per share by 12%, but that higher increase was the result of stock buybacks.

Don't look for sizzling growth in the current quarter, either. McKesson's guidance for its fiscal year 2023, which ends March 31, 2023, is between 3% and 7%. The company's revenue has increased 5% year over year so far in fiscal 2023.

One issue for McKesson is that its COVID-19 tailwind is fading. The company's current contracts with the U.S. government for distributing COVID-19 vaccines and ancillary supplies only run through July of this year. 

Some healthcare stocks make up for modest growth with a strong dividend. However, McKesson isn't one of them. Its dividend yield stands at only 0.64%. Even though the company has grown its dividend quite a bit in recent years, the yield is still nowhere near a level that income investors would find exceptionally attractive.

McKesson lagged well behind the S&P 500 during the previous bull market. It beat the index last year as investors were looking for safe havens. Don't be surprised if the stock underperforms in the next bull market.

One key metric to consider

Investors will have to make their own decisions to determine whether or not McKesson stock is a buy. There is one key metric you'll want to consider, though. McKesson CFO Britt Vitalone noted in the quarterly update in February that the company's return on invested capital is 24%. That's an impressive level that few stocks can match.