A Look at The Big 3: Medical Stocks

Pharmaceutical distribution in the United States is dominated by three firms: Cardinal Health CAH, McKesson MCK, and AmerisourceBergen ABC. AmerisourceBergen is the purest play on this narrow-moat industry. However when siphoning through the numbers one sees their is a big contrast in their stock valuations. Without getting into the Presidents medical proposals, one needs to focus on the value of the individual businesses themselves. All three are trading at reasonable valuations, but digging into the numbers a little deeper, Cardinal Health is clearly the cheaper stock. Cardinal is trading near its book value, while the other two are over 2x book value. Cardinal also offers a much more attractive dividend yield. Cardinal's P/E ratio is currently half the industry average. While all three hold a bright outlook going forward Cardinal seems to have a margin of safety already built into its share price. This is not to say that its stock price could not fall from current levels but that it is trading at a cheaper valuation than the other two companies. With the aging of the population in the United States their is still much upside in this industry and Cardinal offers you a dividend while you wait.

AmerisourceBergen Corporation, a pharmaceutical services company, offers drug distribution and related services to health care providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. It distributes brand name and generic pharmaceuticals, over-the-counter health care products, home health care supplies and equipment, and related services to health care providers, such as acute care hospitals and health systems, independent and chain retail pharmacies, mail order facilities, physicians, medical clinics, and long-term care and other alternate site pharmacies.


Cardinal Health, Inc. provides health care products and services primarily in the United States. The company’s Health care Supply Chain Services segment distributes branded, private-label medical and laboratory, generic pharmaceutical, health care, and consumer products to retail customers, hospitals, and alternate care providers. It provides distribution, inventory management, data/reporting, new product launch support and contract, and charge back administration services, as well as operates a pharmaceutical repackaging and distribution program that offers repackaged pharmaceutical products.


McKesson Corporation, together with its subsidiaries, provides supply, information, and care management products and services for the health care industry. It operates through two segments, Distribution Solutions and Technology Solutions. The Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment, and health and beauty care products in North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers; sells pharmacy software; and provides consulting and outsourcing services. The Technology Solutions segment provides enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions; pharmacy automation for hospitals; and connectivity and outsourcing services.

Company Name	Symbol	Price (9/9/09)	P/B Ratio	Revenue (end June 30th)	Mkt Cap	P/E Ratio (TTM)	Dividend Yield	Debt/Equity Ratio
AmerisourceBergen	ABC	21.43	2.3	70.2b	6.39b	13.3	1.10%	.43
Cardinal Health	CAH	26.83	1.1	99.5b	9.36b	8.5	2.70%	.38
Mckesson	MCK	57.25	2.4	106.5b	15.18b	18.1	.90%	.37

4 Stocks With Rising Dividend$

Below is a screen I ran this morning on dividend stocks. This screen seeks to identify quality companies that have a history of good dividend growth and that also have an additional kicker: their shares are sporting above-average yields. All four are ranked A or better by Standard & Poor's Investor service. All four have grown their dividends at double digits over the last 5 years.

The Strategy for owning/investing in dividend stocks

Cash dividends are tangible. They can't be fabricated, or falsified, or manipulated. Over time, dividends are a true record of a company's performance. They can also represent a significant proportion of an investment's total return. Since 1926, dividends have accounted for almost 42% of the total return (capital appreciation plus reinvested dividends) of the S&P 500. The attraction of a safe, secure dividend, moreover, will help to support and cushion a stock when the market is going through bad times and is under downward pressure.

Company Name	Ticker Symbol	S&P Rank (earnings/div. rank)	Dividend Yield	Dividend Growth Rate(5 yr avg)	Trailing P/E	Current Ratio
VF Corp	VFC	A	3.4%	17.81%	14.9	2.3
Johnson & Johnson	JNJ	A+	3.24%	11.45%	13.4	1.8
Sysco Corp	SYY	A+	3.72%	13.05%	14.5	1.7
Emerson Elec Co	EMR	A	3.47%	10.53%	15.6	1.5

Your Garbage Can Pay You Dividends

First Posted On Our Sister Site @ HighYieldingDividends

Who said their wasn’t money in trash. Well these three companies pass their profits to share holders. Listed below are three companies that are in the waste management industry. Two large caps and one small cap. All three pay a nice dividend. One well known tycoon has a significant stake in Republic Services.

Waste Management, Inc. - was founded in 1894 and is based in Houston, Texas. Waste Management (WM) is the leading provider of comprehensive waste management and environmental services in North America. As of December 31, 2008, the company served nearly 20 million municipal, commercial, industrial and residential customers through a network of 367 collection operations, 355 transfer stations, 273 active landfill disposal sites, 16 waste-to-energy plants, 104 recycling plants, and 111 beneficial-use landfill gas projects.

Republic Services, Inc. - was founded in 1996 and is headquartered in Phoenix, Arizona. Republic Services (RSG) is a leading provider of solid waste collection, transfer, recycling and disposal services. We operate 400 collection companies in 40 states and Puerto Rico and provide top quality services to commercial, industrial, municipal and residential customers. Republic serves millions of residential customers under contracts with more than 3,000 municipalities for waste collection and residential services.

American Ecology Corporation - was founded in 1952 and is headquartered in Boise, Idaho. American Ecology (ECOL) is one of the nation’s oldest providers of radioactive and hazardous waste services. The company accepts hazardous and low-level radioactive waste from commercial and government entities, such as refineries and chemical production facilities, manufacturers, electric utilities, steel mills, and medical and academic institutions. American owns one commercial nuclear waste disposal site and three hazardous waste sites in the United States.

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*William (Bill) H. Gates is chairman of Microsoft Corporation, the worldwide leader in software, services and solutions that help people and businesses realize their full potential. Mr. Gates owns 15% of the common shares through his investment vehicle Cascade Investment LLC and The Gates Foundation.

*Mr. Heil is a land developer and private investor, and has owned and operated one of the largest solid waste landfills in the mid western United States. Mr. Heil has more than 40 years experience in the construction and waste service industries and has, since 2002, served as President of E.F. Heil, LLC, operator of a landfill in Plainfield, Illinois. Mr. Heil is a director of American Ecology and the largest individual share holder in the company owning close to 6%of the common stock.