Critical Review: Cardinal Health (NYSE:CAH) and Sinopharm Group (OTCMKTS:SHTDF)

Sinopharm Group (OTCMKTS:SHTDFGet Free Report) and Cardinal Health (NYSE:CAHGet Free Report) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Sinopharm Group and Cardinal Health, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sinopharm Group 0 0 0 0 N/A
Cardinal Health 1 4 7 0 2.50

Cardinal Health has a consensus target price of $107.57, indicating a potential upside of 11.93%. Given Cardinal Health’s higher possible upside, analysts clearly believe Cardinal Health is more favorable than Sinopharm Group.

Profitability

This table compares Sinopharm Group and Cardinal Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sinopharm Group N/A N/A N/A
Cardinal Health 0.25% -54.74% 3.98%

Institutional & Insider Ownership

16.5% of Sinopharm Group shares are owned by institutional investors. Comparatively, 87.2% of Cardinal Health shares are owned by institutional investors. 0.2% of Cardinal Health shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Sinopharm Group and Cardinal Health’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sinopharm Group N/A N/A N/A $1.00 2.82
Cardinal Health $205.01 billion 0.11 $261.00 million $2.25 42.72

Cardinal Health has higher revenue and earnings than Sinopharm Group. Sinopharm Group is trading at a lower price-to-earnings ratio than Cardinal Health, indicating that it is currently the more affordable of the two stocks.

Dividends

Sinopharm Group pays an annual dividend of $0.26 per share and has a dividend yield of 9.2%. Cardinal Health pays an annual dividend of $2.00 per share and has a dividend yield of 2.1%. Sinopharm Group pays out 26.1% of its earnings in the form of a dividend. Cardinal Health pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cardinal Health has increased its dividend for 27 consecutive years. Sinopharm Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cardinal Health beats Sinopharm Group on 10 of the 13 factors compared between the two stocks.

About Sinopharm Group

(Get Free Report)

Sinopharm Group Co. Ltd., together with its subsidiaries, engages in the wholesale and retail of pharmaceutical and medical devices and healthcare products in the People's Republic of China. The company operates through four segments: Pharmaceutical Distribution, Medical Devices, Retail Pharmacy, and Other Business. The Pharmaceutical Distribution segment distributes pharmaceutical products to hospitals, other distributors, retail pharmacy stores, and clinics. This segment also offers distribution, logistics, and other value-added services for domestic and international pharmaceutical and healthcare products manufacturers, and other suppliers. The Medical Devices segment distributes medical devices. The Retail Pharmacy segment operates and franchises a network of retail drug stores. The Other Business segment engages in the production and sale of pharmaceutical products, chemical reagents, and laboratory supplies. The company also rents and manages properties; distributes medical instruments, Chinese herbal medicines, antibiotics, and biological products; and offers information technology development and medicine consultation, investment, goods and technology import and export, business consultation, health consultation, medical consulting, market information consulting and investigation, and convention and exhibition services. In addition, it manages medical project investment, consulting, and technology training activities. The company was founded in 2003 and is headquartered in Shanghai, the People's Republic of China. Sinopharm Group Co. Ltd. operates as a subsidiary of Sinopharm Industrial Investment Co., Ltd.

About Cardinal Health

(Get Free Report)

Cardinal Health, Inc. operates as a healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines. The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits. The company was incorporated in 1979 and is headquartered in Dublin, Ohio.

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