Dividend Aristocrats In Focus: Cardinal Health, Inc. – Sure Dividend

Up to date on February thirteenth, 2026 by Nathan Parsh

With regards to dividend progress shares, not many can surpass the Dividend Aristocrats. The Dividend Aristocrats are a gaggle of 69 shares within the S&P 500 Index which have elevated their dividends for 25+ consecutive years. These corporations have elevated their dividends yearly with out exception, even throughout recessions.

The Dividend Aristocrats have a confirmed potential to boost their dividends even throughout financial downturns. We’ve got created a full record of all 69 Dividend Aristocrats, together with necessary metrics corresponding to price-to-earnings ratios and dividend yields.

You possibly can obtain an Excel spreadsheet with the complete record of Dividend Aristocrats by clicking on the hyperlink under:

Disclaimer: Certain Dividend just isn’t affiliated with S&P World in any manner. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain Dividend’s personal assessment, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the info on this article or spreadsheet is official information from S&P World. Seek the advice of S&P World for official info.

On this article we’re going to look extra deeply at healthcare distributor Cardinal Well being (CAH).

With 38 consecutive years of dividend will increase, the corporate has clearly confirmed to be a dependable dividend progress inventory, which speaks to the resilience of Cardinal Well being’s enterprise mannequin.

Enterprise Overview

Cardinal Well being, based in 1971, is among the “Huge 3” drug distribution corporations, together with McKesson (MKC) and AmerisourceBergen (ABC). It serves over 100,000 healthcare areas within the U.S. and greater than 90% of the nation’s hospitals.

The corporate has two working segments: Pharmaceutical and Specialty Options and World Medical Merchandise and Distribution. The Pharmaceutical and Specialty Options phase is by far the biggest, representing greater than 90% of complete income.

The Pharmaceutical and Specialty Options phase distributes branded and generic medicine and client merchandise to hospitals and different healthcare suppliers.

In the meantime, the World Medical Merchandise and Distribution phase distributes medical, surgical, and laboratory merchandise to hospitals, surgical procedure facilities, scientific laboratories, and different service facilities.

On February fifth, 2026, Cardinal Well being launched outcomes for the second quarter of fiscal 12 months 2026, which ended December thirty first, 2025. Income surged 18.6% to $65.6 billion, which beat estimates by $360 million.

Adjusted earnings-per-share of $2.63 in contrast favorably to $1.93 within the prior 12 months and was $0.26 higher than anticipated.

Supply: Investor Presentation

Acquisitions drastically aided outcomes through the quarter. For the interval, Pharmaceutical and Specialty Options gross sales grew 19% to $60.7 billion, whereas phase revenue elevated 29% to $687 million. Progress continues to be pushed by positive factors in model and specialty pharmaceutical merchandise from present and new prospects.

Income for the World Medical Merchandise and Distribution phase of $3.3 billion was a 3% enchancment year-over-year whereas phase revenue of $37 million in contrast favorably to $18 million final 12 months. Larger demand from present prospects was offset by the influence of tariffs.

“Different” had income progress of 34% to $1.7 billion whereas phase revenue was greater by 52% to $179 million.

Progress Prospects

Cardinal Well being supplied up to date steerage for fiscal 12 months 2026 as nicely.

Supply: Investor Presentation

The corporate now expects adjusted earnings-per-share in a spread of $10.15 to $10.35 for the fiscal 12 months, up from $9.65 to $9.85 and $9.30 to $9.50 beforehand. On the midpoint, this is able to be a 24.4% enchancment from the prior 12 months.

Cardinal Well being has grown earnings-per-share by a median compound charge of 5.2% and 13.0% during the last ten and 5 years, respectively. Since fiscal 2016, the dividend has grown at 2.6% yearly, however this has slowed to 1.0% for the final 5 years. Transferring ahead, we anticipate dividend progress of 1% yearly.

We’re forecasting 5% intermediate-term earnings progress primarily based on administration’s steerage. Our subdued progress charge view might transform conservative, particularly given the corporate’s penchant for share repurchases. Cardinal Well being has decreased its share depend by greater than 3% yearly during the last decade. The corporate does count on to repurchase not less than $750 million per 12 months.

Aggressive Benefits & Recession Efficiency

Cardinal Well being’s largest aggressive benefit is its distribution functionality, which makes it very tough for opponents to enter the market efficiently.

Cardinal Well being distributes its merchandise to roughly 90% of U.S. hospitals and serves greater than 100,000 healthcare areas within the U.S. It additionally manufactures and distributes greater than 50,000 kinds of Cardinal Well being medical merchandise and process kits. The corporate’s house healthcare enterprise serves over 3.4 million sufferers, with over 46,000 merchandise.

As well as, Cardinal Well being operates in a steady trade with excessive demand. The corporate ought to stay steadily worthwhile, as pharmaceutical merchandise will all the time be wanted to be distributed.

Right here’s a have a look at Cardinal Well being’s earnings-per-share through the Nice Recession:

• 2007 earnings-per-share of $3.41
• 2008 earnings-per-share of $3.80 (11.4% enhance)
• 2009 earnings-per-share of $2.26 (40.5% decline)
• 2010 earnings-per-share of $2.22 (1.8% decline)

Whereas a part of that is recession-related, remember that Cardinal Well being’s monetary outcomes have been materially impacted by its 2009 spinoff of CareFusion Company. Regardless of this spinoff, the corporate’s phase revenues, phase earnings, and dividends continued to develop.

Since individuals will all the time want their medicines and healthcare merchandise, whatever the financial local weather, Cardinal Well being might be thought-about extra recession-resistant than the common firm.

Valuation & Anticipated Returns

Based mostly on anticipated adjusted earnings-per-share of $10.25 for fiscal 2026, and a share worth of ~$221, Cardinal Well being is at the moment buying and selling at a P/E ratio of 21.6.

The inventory has traded palms with a median P/E ratio of 13.3 instances earnings since 2016. In recognition of our anticipated progress charge and the historic valuation common, we’ve used a a number of of 13 instances earnings as a beginning place for honest worth.

A declining P/E a number of might cut back annual returns by 9.6% per 12 months over the following 5 years.

Along with modifications within the valuation a number of, future returns can be generated from earnings progress and dividends. We count on Cardinal Well being to develop earnings-per-share by 5% per 12 months, primarily from income progress and share repurchases.

Lastly, the inventory has a present dividend yield of 0.9%. We word that the tempo of dividend progress has slowed and the present yield is under the common yield of the S&P 500. Nevertheless, firm’s has a protracted monitor file of dividend progress, with virtually 4 a long time of annual raises.

As a Dividend Aristocrat, Cardinal Well being will doubtless proceed elevating its dividend every year. Furthermore, the dividend seems safe, with a projected dividend payout ratio of roughly 20% for fiscal 2026.

Placing all of the items collectively – common progress and dividend yield offset by a significant valuation headwind – our anticipated complete return for Cardinal Well being is -4.0% per 12 months over the following 5 years. Our projection stems from 5% earnings progress and the beginning yield which are greater than offset by a number of contraction. As a result of firm’s excellent monitor file of progress, we charge shares of Cardinal Well being inventory as a maintain proper now.

Closing Ideas

Cardinal Well being is a Dividend Aristocrat that has elevated its dividend for almost 40 years. The corporate continues to develop income and phase revenue improved in all companies final quarter. Mixed with share repurchases, the corporate ought to proceed to see optimistic earnings-per-share progress going ahead.

Excessive-quality corporations like Cardinal Well being have withstood tough durations and can achieve this once more. The corporate’s historical past, its dividend historical past, and its present yield of 0.9% make the inventory an attention-grabbing alternative for earnings buyers. Nevertheless, complete anticipated returns stay very low, making the inventory a maintain for the time being.

Moreover, the next Certain Dividend databases comprise essentially the most dependable dividend growers in our funding universe:

If you happen to’re in search of shares with distinctive dividend traits, take into account the next Certain Dividend databases:

The most important home inventory market indices are one other strong useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month: