Intrinsic value of Cardinal Health - CAH

Previous Close

$51.90

  Intrinsic Value

$169.21

stock screener

  Rating & Target

str. buy

+226%

Previous close

$51.90

 
Intrinsic value

$169.21

 
Up/down potential

+226%

 
Rating

str. buy

We calculate the intrinsic value of CAH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 16.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
Revenue, $m
  138,944
  148,268
  157,963
  168,049
  178,546
  189,477
  200,864
  212,732
  225,109
  238,021
  251,499
  265,574
  280,277
  295,645
  311,712
  328,517
  346,100
  364,501
  383,766
  403,939
  425,069
  447,206
  470,403
  494,716
  520,201
  546,921
  574,938
  604,320
  635,137
  667,463
Variable operating expenses, $m
  136,102
  145,173
  154,605
  164,418
  174,631
  185,266
  196,344
  207,891
  219,933
  232,495
  244,688
  258,381
  272,686
  287,638
  303,270
  319,620
  336,726
  354,629
  373,372
  392,999
  413,557
  435,094
  457,663
  481,317
  506,112
  532,108
  559,367
  587,953
  617,936
  649,385
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  136,102
  145,173
  154,605
  164,418
  174,631
  185,266
  196,344
  207,891
  219,933
  232,495
  244,688
  258,381
  272,686
  287,638
  303,270
  319,620
  336,726
  354,629
  373,372
  392,999
  413,557
  435,094
  457,663
  481,317
  506,112
  532,108
  559,367
  587,953
  617,936
  649,385
Operating income, $m
  2,842
  3,095
  3,358
  3,631
  3,915
  4,211
  4,519
  4,841
  5,176
  5,526
  6,812
  7,193
  7,591
  8,007
  8,442
  8,897
  9,374
  9,872
  10,394
  10,940
  11,512
  12,112
  12,740
  13,399
  14,089
  14,813
  15,571
  16,367
  17,202
  18,077
EBITDA, $m
  4,958
  5,291
  5,637
  5,997
  6,371
  6,761
  7,168
  7,591
  8,033
  8,493
  8,974
  9,477
  10,001
  10,550
  11,123
  11,723
  12,350
  13,007
  13,694
  14,414
  15,168
  15,958
  16,786
  17,653
  18,563
  19,516
  20,516
  21,564
  22,664
  23,817
Interest expense (income), $m
  200
  561
  686
  815
  949
  1,089
  1,234
  1,385
  1,543
  1,707
  1,878
  2,057
  2,243
  2,438
  2,641
  2,854
  3,076
  3,308
  3,552
  3,806
  4,073
  4,352
  4,644
  4,950
  5,271
  5,608
  5,960
  6,330
  6,717
  7,124
  7,550
Earnings before tax, $m
  2,281
  2,409
  2,542
  2,682
  2,826
  2,977
  3,134
  3,298
  3,469
  3,648
  4,755
  4,950
  5,153
  5,366
  5,589
  5,821
  6,065
  6,320
  6,588
  6,867
  7,161
  7,468
  7,790
  8,127
  8,481
  8,852
  9,242
  9,650
  10,078
  10,527
Tax expense, $m
  616
  650
  686
  724
  763
  804
  846
  891
  937
  985
  1,284
  1,336
  1,391
  1,449
  1,509
  1,572
  1,638
  1,706
  1,779
  1,854
  1,933
  2,016
  2,103
  2,194
  2,290
  2,390
  2,495
  2,605
  2,721
  2,842
Net income, $m
  1,665
  1,758
  1,856
  1,958
  2,063
  2,173
  2,288
  2,408
  2,533
  2,663
  3,471
  3,613
  3,762
  3,917
  4,080
  4,250
  4,428
  4,614
  4,809
  5,013
  5,227
  5,452
  5,687
  5,933
  6,191
  6,462
  6,746
  7,044
  7,357
  7,685

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  42,884
  45,762
  48,754
  51,867
  55,107
  58,480
  61,995
  65,658
  69,478
  73,463
  77,623
  81,967
  86,505
  91,248
  96,207
  101,394
  106,821
  112,500
  118,446
  124,673
  131,194
  138,027
  145,186
  152,690
  160,556
  168,803
  177,450
  186,519
  196,030
  206,007
Adjusted assets (=assets-cash), $m
  42,884
  45,762
  48,754
  51,867
  55,107
  58,480
  61,995
  65,658
  69,478
  73,463
  77,623
  81,967
  86,505
  91,248
  96,207
  101,394
  106,821
  112,500
  118,446
  124,673
  131,194
  138,027
  145,186
  152,690
  160,556
  168,803
  177,450
  186,519
  196,030
  206,007
Revenue / Adjusted assets
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
  3.240
Average production assets, $m
  11,949
  12,751
  13,585
  14,452
  15,355
  16,295
  17,274
  18,295
  19,359
  20,470
  21,629
  22,839
  24,104
  25,425
  26,807
  28,252
  29,765
  31,347
  33,004
  34,739
  36,556
  38,460
  40,455
  42,546
  44,737
  47,035
  49,445
  51,972
  54,622
  57,402
Working capital, $m
  -7,086
  -7,562
  -8,056
  -8,570
  -9,106
  -9,663
  -10,244
  -10,849
  -11,481
  -12,139
  -12,826
  -13,544
  -14,294
  -15,078
  -15,897
  -16,754
  -17,651
  -18,590
  -19,572
  -20,601
  -21,679
  -22,808
  -23,991
  -25,230
  -26,530
  -27,893
  -29,322
  -30,820
  -32,392
  -34,041
Total debt, $m
  12,705
  15,093
  17,577
  20,161
  22,850
  25,650
  28,567
  31,607
  34,778
  38,086
  41,538
  45,144
  48,910
  52,847
  56,963
  61,268
  65,772
  70,486
  75,421
  80,589
  86,002
  91,673
  97,616
  103,844
  110,372
  117,217
  124,395
  131,921
  139,816
  148,097
Total liabilities, $m
  35,594
  37,982
  40,466
  43,050
  45,739
  48,539
  51,456
  54,496
  57,667
  60,975
  64,427
  68,033
  71,799
  75,736
  79,852
  84,157
  88,661
  93,375
  98,310
  103,478
  108,891
  114,562
  120,505
  126,733
  133,261
  140,106
  147,284
  154,810
  162,705
  170,986
Total equity, $m
  7,290
  7,779
  8,288
  8,817
  9,368
  9,942
  10,539
  11,162
  11,811
  12,489
  13,196
  13,934
  14,706
  15,512
  16,355
  17,237
  18,160
  19,125
  20,136
  21,194
  22,303
  23,465
  24,682
  25,957
  27,295
  28,696
  30,167
  31,708
  33,325
  35,021
Total liabilities and equity, $m
  42,884
  45,761
  48,754
  51,867
  55,107
  58,481
  61,995
  65,658
  69,478
  73,464
  77,623
  81,967
  86,505
  91,248
  96,207
  101,394
  106,821
  112,500
  118,446
  124,672
  131,194
  138,027
  145,187
  152,690
  160,556
  168,802
  177,451
  186,518
  196,030
  206,007
Debt-to-equity ratio
  1.740
  1.940
  2.120
  2.290
  2.440
  2.580
  2.710
  2.830
  2.940
  3.050
  3.150
  3.240
  3.330
  3.410
  3.480
  3.550
  3.620
  3.690
  3.750
  3.800
  3.860
  3.910
  3.950
  4.000
  4.040
  4.080
  4.120
  4.160
  4.200
  4.230
Adjusted equity ratio
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,665
  1,758
  1,856
  1,958
  2,063
  2,173
  2,288
  2,408
  2,533
  2,663
  3,471
  3,613
  3,762
  3,917
  4,080
  4,250
  4,428
  4,614
  4,809
  5,013
  5,227
  5,452
  5,687
  5,933
  6,191
  6,462
  6,746
  7,044
  7,357
  7,685
Depreciation, amort., depletion, $m
  2,116
  2,196
  2,279
  2,366
  2,456
  2,550
  2,648
  2,750
  2,857
  2,968
  2,163
  2,284
  2,410
  2,543
  2,681
  2,825
  2,976
  3,135
  3,300
  3,474
  3,656
  3,846
  4,045
  4,255
  4,474
  4,704
  4,944
  5,197
  5,462
  5,740
Funds from operations, $m
  3,781
  3,954
  4,135
  4,323
  4,519
  4,724
  4,936
  5,158
  5,389
  5,631
  5,634
  5,897
  6,172
  6,460
  6,760
  7,075
  7,404
  7,749
  8,109
  8,487
  8,883
  9,298
  9,732
  10,188
  10,665
  11,166
  11,691
  12,242
  12,819
  13,425
Change in working capital, $m
  -457
  -475
  -494
  -514
  -535
  -557
  -581
  -605
  -631
  -659
  -687
  -718
  -750
  -784
  -819
  -857
  -897
  -938
  -982
  -1,029
  -1,078
  -1,129
  -1,183
  -1,240
  -1,300
  -1,363
  -1,429
  -1,498
  -1,572
  -1,649
Cash from operations, $m
  4,238
  4,430
  4,630
  4,838
  5,055
  5,281
  5,517
  5,763
  6,020
  6,289
  6,321
  6,615
  6,922
  7,243
  7,580
  7,932
  8,301
  8,687
  9,092
  9,516
  9,960
  10,426
  10,915
  11,428
  11,965
  12,529
  13,120
  13,740
  14,391
  15,074
Maintenance CAPEX, $m
  -1,115
  -1,195
  -1,275
  -1,358
  -1,445
  -1,535
  -1,629
  -1,727
  -1,829
  -1,936
  -2,047
  -2,163
  -2,284
  -2,410
  -2,543
  -2,681
  -2,825
  -2,976
  -3,135
  -3,300
  -3,474
  -3,656
  -3,846
  -4,045
  -4,255
  -4,474
  -4,704
  -4,944
  -5,197
  -5,462
New CAPEX, $m
  -795
  -802
  -834
  -867
  -903
  -940
  -979
  -1,021
  -1,064
  -1,110
  -1,159
  -1,210
  -1,265
  -1,322
  -1,382
  -1,445
  -1,512
  -1,583
  -1,657
  -1,735
  -1,817
  -1,904
  -1,995
  -2,091
  -2,192
  -2,298
  -2,410
  -2,527
  -2,650
  -2,780
Cash from investing activities, $m
  -1,910
  -1,997
  -2,109
  -2,225
  -2,348
  -2,475
  -2,608
  -2,748
  -2,893
  -3,046
  -3,206
  -3,373
  -3,549
  -3,732
  -3,925
  -4,126
  -4,337
  -4,559
  -4,792
  -5,035
  -5,291
  -5,560
  -5,841
  -6,136
  -6,447
  -6,772
  -7,114
  -7,471
  -7,847
  -8,242
Free cash flow, $m
  2,328
  2,433
  2,521
  2,612
  2,707
  2,805
  2,908
  3,015
  3,127
  3,243
  3,115
  3,242
  3,374
  3,511
  3,655
  3,806
  3,963
  4,128
  4,300
  4,481
  4,669
  4,867
  5,074
  5,291
  5,519
  5,757
  6,007
  6,269
  6,543
  6,831
Issuance/(repayment) of debt, $m
  2,310
  2,388
  2,484
  2,584
  2,689
  2,800
  2,917
  3,040
  3,171
  3,308
  3,453
  3,606
  3,767
  3,937
  4,116
  4,305
  4,504
  4,714
  4,935
  5,168
  5,413
  5,671
  5,942
  6,228
  6,529
  6,845
  7,177
  7,527
  7,894
  8,281
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,310
  2,388
  2,484
  2,584
  2,689
  2,800
  2,917
  3,040
  3,171
  3,308
  3,453
  3,606
  3,767
  3,937
  4,116
  4,305
  4,504
  4,714
  4,935
  5,168
  5,413
  5,671
  5,942
  6,228
  6,529
  6,845
  7,177
  7,527
  7,894
  8,281
Total cash flow (excl. dividends), $m
  4,637
  4,821
  5,004
  5,196
  5,396
  5,606
  5,825
  6,055
  6,297
  6,551
  6,568
  6,847
  7,140
  7,448
  7,771
  8,111
  8,468
  8,842
  9,235
  9,648
  10,082
  10,538
  11,017
  11,519
  12,047
  12,602
  13,184
  13,796
  14,438
  15,112
Retained Cash Flow (-), $m
  -462
  -489
  -509
  -529
  -551
  -574
  -597
  -623
  -649
  -678
  -707
  -738
  -771
  -806
  -843
  -882
  -923
  -966
  -1,011
  -1,058
  -1,109
  -1,162
  -1,217
  -1,276
  -1,337
  -1,402
  -1,470
  -1,542
  -1,617
  -1,696
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  130
  139
  148
  158
  168
  179
  189
  201
  213
  225
  238
  251
  266
  280
  296
  312
  329
  346
  365
  384
  404
  425
  447
  470
  495
  520
  547
  575
  604
  635
Cash available for distribution, $m
  4,175
  4,332
  4,496
  4,667
  4,845
  5,032
  5,228
  5,433
  5,648
  5,873
  5,861
  6,109
  6,369
  6,642
  6,928
  7,229
  7,545
  7,877
  8,225
  8,590
  8,974
  9,377
  9,800
  10,244
  10,710
  11,200
  11,714
  12,254
  12,821
  13,416
Discount rate, %
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
  3,976
  3,911
  3,827
  3,726
  3,607
  3,472
  3,320
  3,154
  2,974
  2,782
  2,477
  2,282
  2,083
  1,881
  1,681
  1,486
  1,297
  1,117
  950
  795
  656
  532
  424
  332
  255
  192
  141
  102
  71
  49
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Cardinal Health, Inc. is a healthcare services and products company. The Company operates through two segments: Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, over-the-counter healthcare and consumer products. This segment also operates nuclear pharmacies and cyclotron facilities; provides pharmacy management services to hospitals, as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers, and provides services to healthcare companies. The Medical segment distributes a range of medical, surgical and laboratory products, and provides services to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers. This segment also manufactures, sources and develops its own Cardinal Health brand medical and surgical products. It provides post-acute care management and transition services, and software to hospitals.

FINANCIAL RATIOS  of  Cardinal Health (CAH)

Valuation Ratios
P/E Ratio 12.7
Price to Sales 0.1
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 13.9
Price to Free Cash Flow 20.6
Growth Rates
Sales Growth Rate 6.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.8%
Cap. Spend. - 3 Yr. Gr. Rate 9.2%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 133.2%
Total Debt to Equity 152.7%
Interest Coverage 11
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 4.4%
Return On Total Capital 8.8%
Ret/ On T. Cap. - 3 Yr. Avg. 10.6%
Return On Equity 19.3%
Return On Equity - 3 Yr. Avg. 20.3%
Asset Turnover 3.5
Profitability Ratios
Gross Margin 5%
Gross Margin - 3 Yr. Avg. 5.3%
EBITDA Margin 2.2%
EBITDA Margin - 3 Yr. Avg. 2.4%
Operating Margin 1.6%
Oper. Margin - 3 Yr. Avg. 1.9%
Pre-Tax Margin 1.5%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin 1%
Net Profit Margin - 3 Yr. Avg. 1.1%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 36.1%
Payout Ratio 44.8%

CAH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CAH stock intrinsic value calculation we used $129976 million for the last fiscal year's total revenue generated by Cardinal Health. The default revenue input number comes from 2017 income statement of Cardinal Health. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CAH stock valuation model: a) initial revenue growth rate of 6.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5%, whose default value for CAH is calculated based on our internal credit rating of Cardinal Health, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Cardinal Health.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CAH stock the variable cost ratio is equal to 98%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CAH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Cardinal Health.

Corporate tax rate of 27% is the nominal tax rate for Cardinal Health. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CAH stock is equal to 0.1%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CAH are equal to 8.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Cardinal Health operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CAH is equal to -5.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6828 million for Cardinal Health - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 317 million for Cardinal Health is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Cardinal Health at the current share price and the inputted number of shares is $16.5 billion.

RELATED COMPANIES Price Int.Val. Rating
ABC AmerisourceBer 87.72 199.01  str.buy
MCK McKesson 129.38 355.02  str.buy
OMI Owens&Minor 15.89 28.37  str.buy
MMSI Merit Medical 56.65 1.38  str.sell
CVS CVS Health 73.68 120.89  str.buy
DYNT Dynatronics 2.75 0.42  str.sell

COMPANY NEWS

▶ 3 Value Plays That Wont Cut Investors   [Aug-07-18 01:44PM  InvestorPlace]
▶ Top 5 Things To Know In The Market On Monday   [08:25AM  Investing.com]
▶ Cardinal: Fiscal 4Q Earnings Snapshot   [07:32AM  Associated Press]
▶ Missouri governments sue drug companies over opioid epidemic   [Aug-02-18 04:13PM  American City Business Journals]
▶ Brentwood firm to hire up to 500 people   [Jul-24-18 08:23AM  American City Business Journals]
▶ 3 Top Stocks Wall Street Is Overlooking   [Jul-11-18 08:18PM  Motley Fool]
▶ 7 S&P 500 Stocks With Low P/E Ratios   [10:37AM  InvestorPlace]
▶ Four Cheap 'Dividend Aristocrats' to Buy Now   [Jun-24-18 09:00AM  TheStreet.com]
▶ Should Cardinal Health Inc (NYSE:CAH) Be Your Next Stock Pick?   [Jun-19-18 01:09PM  Simply Wall St.]
▶ Nashville health-IT firm gets new majority owners   [Jun-13-18 03:39PM  American City Business Journals]
▶ June Undervalued Utilities Opportunities   [Jun-09-18 08:02AM  Simply Wall St.]
▶ Markets Right Now: US stocks closing mostly higher   [Jun-05-18 04:13PM  Associated Press]
▶ Robust Dividend Stocks That Are Now Undervalued   [May-21-18 04:05PM  Simply Wall St.]
▶ General Electric drops again on Fortune 500 list   [01:07PM  American City Business Journals]
▶ May Healthcare Dividend Stocks To Look Out For   [06:02AM  Simply Wall St.]
▶ Axway promotes CFO to lead global tech firm's transformation   [May-17-18 10:05AM  American City Business Journals]
▶ 3 Top Healthcare Stocks to Buy in May   [06:00AM  Motley Fool]
▶ 2 Stocks That Look Real Good to Short   [May-13-18 03:30PM  TheStreet.com]
▶ Best NYSE Dividend Payers   [09:02AM  Simply Wall St.]
▶ Asian shares rally as modest inflation eases rate hike fears   [May-10-18 11:55PM  Associated Press]
▶ Stock Market News For May 4, 2018   [May-04-18 10:11AM  Zacks]
▶ Asia follows US markets lower as investors watch trade talks   [May-03-18 11:44PM  Associated Press]
▶ Post Up: Cardinal Health   [03:27PM  CNBC Videos]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.