We look for high quality dividend stocks with strong competitive advantages and shareholder friendly managements trading at fair or better prices, explains Ben Reynolds, editor of Sure Dividend.
Cardinal Health (CAH) — a healthcare services and products company operating in the pharmaceutical and medical sectors — underperformed the market by more than 20% in 2016.
The company’s stock price fell due to intense pricing pressure within the pharmaceutical distribution industry. That trend is set to reverse in 2017.
Cardinal Health is a Dividend Aristocrat with a 2.5% dividend yield. The stock has increased its dividend payments for 32 consecutive years.
What immediately stands out about Cardinal Health is its low P/E ratio. The stock is trading for an adjusted P/E ratio of 14.
Its average P/E ratio over the last 3 years is 20. The stock appears significantly undervalued — and it has excellent growth prospects.
Cardinal Health's management expects 10% to 15% earnings-per-share growth over the long run. The stock is poised to for significant share price appreciation in 2017.
Cardinal Health — our Top Pick for 2017 —is a high quality business with a shareholder friendly management trading for a bargain price.
