Don't overlook NYSE:CAH—a stock with solid growth prospects and a reasonable valuation.

Here's CARDINAL HEALTH INC (NYSE:CAH) for you, a growth stock our stock screener believes is undervalued. NYSE:CAH is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Growth Analysis for NYSE:CAH

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:CAH has received a 7 out of 10:

• CAH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.25%, which is quite impressive.
• CAH shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.99%.
• Measured over the past years, CAH shows a quite strong growth in Revenue. The Revenue has been growing by 8.43% on average per year.
• CAH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.81% yearly.
• The Revenue is expected to grow by 8.11% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Valuation Analysis for NYSE:CAH

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:CAH has achieved a 7 out of 10:

• Based on the Price/Earnings ratio, CAH is valued cheaper than 86.21% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 25.20. CAH is valued slightly cheaper when compared to this.
• 87.07% of the companies in the same industry are more expensive than CAH, based on the Price/Forward Earnings ratio.
• Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, CAH is valued a bit cheaper.
• CAH's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CAH is cheaper than 81.03% of the companies in the same industry.
• CAH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CAH is cheaper than 92.24% of the companies in the same industry.
• CAH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• CAH's earnings are expected to grow with 14.84% in the coming years. This may justify a more expensive valuation.

Health Assessment of NYSE:CAH

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:CAH scores a 5 out of 10:

• CAH has an Altman-Z score of 5.06. This indicates that CAH is financially healthy and has little risk of bankruptcy at the moment.
• CAH has a Altman-Z score of 5.06. This is amongst the best in the industry. CAH outperforms 88.79% of its industry peers.
• CAH has a debt to FCF ratio of 1.38. This is a very positive value and a sign of high solvency as it would only need 1.38 years to pay back of all of its debts.
• CAH has a better Debt to FCF ratio (1.38) than 87.93% of its industry peers.

Profitability Assessment of NYSE:CAH

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:CAH was assigned a score of 5 for profitability:

• Looking at the Return On Assets, with a value of 1.37%, CAH is in the better half of the industry, outperforming 62.93% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 19.39%, CAH belongs to the best of the industry, outperforming 97.41% of the companies in the same industry.
• CAH had an Average Return On Invested Capital over the past 3 years of 10.97%. This is above the industry average of 8.62%.
• The last Return On Invested Capital (19.39%) for CAH is above the 3 year average (10.97%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 0.30%, CAH is in the better half of the industry, outperforming 61.21% of the companies in the same industry.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of CAH for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.