Cardinal Health Inc (NYSE:CAH) built a massive footprint
through a series of mergers and acquisitions. It now sells medical products to
nearly all U.S. hospitals. Despite its impressive growth, the company’s share
price struggled to breakthrough, either before or after the pandemic hit.
It sold over $152.9 billion worth of products in the 2020
fiscal year, so as an investment opportunity is Cardinal Health stock a Buy?
What started as a food distribution business shifted to
medical equipment and pharmaceuticals over the years. When the pandemic spread,
management shifted priorities to invest in connected care and specialty
business segments.
Healthcare isn’t a cheap business – everything the company
sells must be approved by the Food and Drug Administration (FDA). Still, it
manages to be one of the highest revenue-generating companies in the United
States.
Can Cardinal Health continue generating those healthy
revenues?
Cardinal Health Is A Drug & Device Giant
Cardinal Health started as Cardinal Foods in 1971. It was a
food wholesaler that earned enough on its bottom line to buy Baily Drug
Company, and thereafter expanded into drug distribution. That led to its 1983
public offering and a long history of mergers and acquisitions.
After selling off its food business, this vertically
integrated company expanded horizontally. It bought over a dozen companies to
expand its drug and device manufacturing and distribution capabilities.
Today, it offers logistics, products, technology, and
business services to nearly 90 percent of all U.S. hospitals. It also provides
products to labs, pharmacies, specialty offices and clinics, and home
healthcare.
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