May 28, 2025 a 07:46 am
CAH: Dividend Analysis - Cardinal Health, Inc.
Cardinal Health, Inc. presents a complex dividend profile with a current yield of 1.31%. The company's payout ratios suggest a conservative approach to dividend sustainability. Despite a long dividend history of 40 years, recent trends indicate some fluctuations in their strategy, as seen with the last cut in 2024. 📊
Overview
The following table provides an essential snapshot of Cardinal Health’s dividend profile, offering insights into its sector, yield, and dividend history. 🗣️
| Metric | Details |
|---|---|
| Sector | Healthcare |
| Dividend yield | 1.31% |
| Current dividend per share | 2.04 USD |
| Dividend history | 40 years |
| Last cut or suspension | 2024 |
Dividend History
Analysis of the dividend history allows investors to assess consistency and commitment to shareholder returns. Such insights help gauge potential risks and benefits. 📈
| Year | Dividend Per Share |
|---|---|
| 2025 | 1.5219 USD |
| 2024 | 1.5118 USD |
| 2023 | 1.9975 USD |
| 2022 | 1.9779 USD |
| 2021 | 1.9583 USD |
Dividend Growth
Evaluating dividend growth over different periods allows investors to understand the company's future dividend potential and stability. ⚠️
| Time | Growth |
|---|---|
| 3 years | -8.26% |
| 5 years | -4.66% |
The average dividend growth is -4.66% over 5 years. This shows a concerning decline in dividends, which might impact investor sentiment. 📉
Payout Ratio
The payout ratio is integral to understanding a company's ability to maintain its dividend payments. A lower ratio typically indicates a sustainable dividend. ✅
| Key figure | Ratio |
|---|---|
| EPS-based | 31.37% |
| Free cash flow-based | 19.93% |
With an EPS payout ratio of 31.37% and FCF payout ratio of 19.93%, Cardinal Health appears to have a sustainable dividend strategy, aligning well with conservative financial policies. ⚠️
Cashflow & Capital Efficiency
Understanding cash flow and capital efficiency is crucial in assessing a company's operational health and its ability to fund dividends and growth without over-leveraging. 💼
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 13.57% | 9.55% | 18.75% |
| Earnings Yield | 3.56% | 1.06% | -6.39% |
| CAPEX to Operating Cash Flow | 13.58% | 16.94% | 12.40% |
| Stock-based Compensation to Revenue | 0.05% | 0.05% | 0.04% |
| Free Cash Flow / Operating Cash Flow Ratio | 86.42% | 83.06% | 87.60% |
The stable cash flow metrics suggest Cardinal Health maintains a healthy operation, underscored by a substantial free cash flow yield. This indicates efficient capital use, essential for long-term sustainability. 💹
Balance Sheet & Leverage Analysis
Examining the balance sheet provides insights into the company's leverage and financial stability, a vital component for dividend sustainability. 📚
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | -1.58 | -1.65 | -7.53 |
| Debt-to-Assets | 11.28% | 10.83% | 12.11% |
| Debt-to-Capital | 270.99% | 254.11% | 115.32% |
| Net Debt to EBITDA | -0.02 | 0.46 | 4.75 |
| Current Ratio | 0.94 | 1.00 | 1.08 |
| Quick Ratio | 0.56 | 0.53 | 0.57 |
| Financial Leverage | -14.04 | -15.23 | -62.15 |
The negative debt-to-equity ratio signals potential accounting anomalies or fiscal distress. However, the company maintains sufficient liquidity, suggesting an ability to meet short-term obligations. 🔍
Fundamental Strength & Profitability
Cardinal Health's profitability and operational efficiency metrics are pivotal in evaluating its fundamental strength, offering insight into long-term growth potential and value creation. 💪
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -26.52% | -9.15% | 132.01% |
| Return on Assets | 1.89% | 0.60% | -2.12% |
| Return on Invested Capital | 8.90% | 2.84% | 14.36% |
| Net Margin | 0.38% | 0.13% | -0.51% |
| EBIT Margin | 0.55% | 0.36% | -0.35% |
| EBITDA Margin | 0.87% | 0.70% | 0.07% |
| Gross Margin | 3.27% | 3.36% | 3.61% |
| Research & Development to Revenue | 0% | 0% | 0% |
While recent profitability is low, historical performance indicates potential for improvement. Negative ROE suggests strategic reevaluation may be necessary. 📊
Price Development
Dividend Scoring System
| Criteria | Score | Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 3 | |
| Dividend growth | 1 | |
| Payout ratio | 4 | |
| Financial stability | 2 | |
| Dividend continuity | 3 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 22/40
Rating
Overall, Cardinal Health reflects glimpses of stability, but faces significant challenges due to declining dividend growth and negative leverage figures. The firm’s current fiscal strategies suggest a cautious investment stance, prioritizing those who are content with modest yields amidst uncertain improvement potential. 📉