MCKESSON CORP (NYSE:MCK) – A Healthcare Stock with Strong Growth and Reasonable Valuation

MCKESSON CORP (NYSE:MCK) was identified as an affordable growth stock by our screener, which looks for companies with solid growth, reasonable valuations, and stable financial health. The healthcare distributor stands out with strong revenue and earnings expansion while maintaining a balanced valuation.

Growth Prospects

• Revenue Growth: MCK has increased revenue by 16.22% over the past year, with a 5-year average annual growth rate of 9.22%.
• Earnings Expansion: Earnings per share (EPS) grew 20.71% in the last year and have expanded at 17.17% annually over the past five years.
• Future Expectations: Analysts project EPS growth of 13.18% and revenue growth of 8.06% annually in the coming years.

Valuation Assessment

• P/E Ratio: At 21.62, MCK trades below the industry average P/E of 35.55, making it cheaper than 65% of its peers.
• Forward P/E: The forward P/E of 18.96 is also below the S&P 500 average (35.58).
• Price-to-Free Cash Flow: The company is more attractively priced than 70.87% of industry competitors based on this metric.

Financial Health & Profitability

• ROIC Strength: MCK generates a 30.35% return on invested capital, outperforming 98% of its sector.
• Debt Management: The debt-to-free-cash-flow ratio is a healthy 1.08, indicating strong solvency.
• Profit Margins: While margins are modest (operating margin of 1.40%), they have remained stable.

Our Affordable Growth screener lists more stocks with similar characteristics and is updated daily.
For a deeper look, review the full fundamental analysis of MCK.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.