Dividend Investors: Stop Overlooking Cardinal Health Inc (CAH)

Headquartered in Dublin, Ohio you probably don’t think of Cardinal Health Inc (NYSE:CAH) as being a big enterprise.

Yet based on revenue this healthcare company is the 21^st largest firm in the U.S.; ahead of names like Microsoft Corporation (NASDAQ:MSFT), Procter & Gamble Co (NYSE:PG), Johnson & Johnson (NYSE:JNJ) and PepsiCo, Inc. (NYSE:PEP).

Cardinal Health operates in the generic pharmaceutical and medical supply industries. There are powerful headwinds in this industry:

– Rising population means more health care

– Aging population means more health care

– More ailments are treatable which means more health care

Cardinal Health is poised to benefit from these trends… And it has strong fundamental numbers that make the company a Top 10 stock and current buy based on The 8 Rules of Dividend Investing.

This article takes a look at the investment opportunity at Cardinal Health

Cardinal Health’s Business

Cardinal Health is one of those firms that sort of operates in the background as far as branded products go.

Consumers seek out a The Coca-Cola Co (NYSE:KO) beverage or a Gillette razor. You probably don’t go around asking for a Cardinal Health product at a hospital, but there’s a good chance that you’ve been exposed to some of the company’s products:

Source: Cardinal Health 2015 Annual Report

Or perhaps more accurately, a very good chance:

Source: Cardinal Health 2015 Annual Report

As an operating business, Cardinal Health has been reasonably profitable in the last decade or so. Yearly income has ranged $800 million to $1.4 billion over the past 10 years – highlighting both the thin margins associated with the company’s business, but also the consistency along the way.

Here’s a look at the company’s per share performance over the last five years:

Source: Cardinal Health 2015 Annual Report