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MCK vs. CAH: Which Drug Distribution Giant Has the Healthier Outlook?
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McKesson (MCK - Free Report) and Cardinal Health (CAH - Free Report) are two of the largest healthcare distribution companies in the United States, playing a critical role in the pharmaceutical supply chain. As essential intermediaries between drug manufacturers and healthcare providers, both companies benefit from consistent demand and long-term industry tailwinds.
However, with evolving healthcare regulations, inflationary pressures and shifting margins, investors may wonder which stock offers stronger upside potential right now. While both firms boast solid fundamentals and nationwide scale, their recent financial performance and strategic positioning tell a different story. In this faceoff, we’ll examine which healthcare distributor stands out as the better investment opportunity today.
Financial Comparison
McKesson reported fourth-quarter fiscal 2025 adjusted earnings per share (EPS) of $10.12, which beat the Zacks Consensus Estimate of $9.81 by 3.2%. The bottom line improved 63.8% on a year-over-year basis on the back of strength in core pharmaceutical distribution business, expansion of the Oncology platform and continued growth of differentiated biopharma solutions.
Image Source: Zacks Investment Research
In contrast, Cardinal Health reported third-quarter fiscal 2025 adjusted EPS of $2.35, which beat the Zacks Consensus Estimate of $2.15 by 9.3%. The bottom line also improved 12.4% year over year, primarily driven by strong demand for its Pharmaceutical and Specialty solutions.
How Do Estimates Compare for MCK & CAH?
The Zacks Consensus Estimate for MCK’s fiscal 2026 sales and EPS implies a year-over-year improvement of 12.4% and 12.3%, respectively. EPS estimates for fiscal 2026 have improved 1.4% over the past 60 days.
MCK Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CAH’s 2025 sales and EPS implies a year-over-year decline of 1.7% and an improvement of 7.8%, respectively. However, EPS estimates for 2025 have improved 2.3% over the past 30 days.
CAH Estimate Movement
Image Source: Zacks Investment Research
Diversification Boosts MCK’s Prospect
McKesson heads into the second half of 2025 with a strong operational and financial foundation, making it a compelling option for investors seeking defensive exposure to the healthcare sector. The company has steadily evolved beyond traditional drug distribution by expanding into higher-margin areas such as oncology, biopharma services and healthcare technology solutions. This diversification strategy not only supports margin stability but also positions McKesson to benefit from the growing complexity of pharmaceutical care and demand for data-driven services.
In its most recent earnings report, McKesson demonstrated solid revenue growth, stable margins and robust free cash flow generation. The company continues to reward shareholders through consistent share repurchases and dividend increases, reflecting confidence in its long-term strategy. Moreover, demand tailwinds from an aging U.S. population and rising prescription volumes support a steady outlook for 2025.
However, regulatory headwinds, particularly those surrounding drug pricing and reimbursement policy, remain a key risk for the business. Nonetheless, McKesson’s scale, operational discipline and focus on innovation give it an edge in a competitive landscape.
Medical Segment: Key to CAH’s Growth
Cardinal Health’s prospects in the rest of 2025 are likely to be driven by renewed investor optimism following a series of strategic improvements aimed at revitalizing its business model. After facing margin pressures and operational challenges in recent years, the company has shifted focus toward efficiency gains, cost controls and expanding its higher-growth medical segment. Its Pharmaceutical segment continues to provide scale and revenue consistency, while the Medical segment is expected to be a key growth driver, supported by increased demand for surgical and laboratory products.
CAH’s first-quarter performance showed strong revenue growth and improving profitability, especially as management executed its cost-saving initiatives.
Its strategic transformation, improving margin profile and exposure to key healthcare trends present a promising outlook. However, like McKesson, CAH faces external risks from drug pricing policy shifts and reimbursement rate volatility.
MCK & CAH: Price Performance & Valuation
So far this year, shares of both McKesson and Cardinal Health have been impressive, with MCK slightly underperforming CAH. The rise in the share price of both companies is likely due to the increasing demand for drug retailing, especially GLP-1 drugs. Shares of MCK and CAH have surged 25.7% and 29.2%, respectively.
The Zacks Style Score can help investors make a prudent choice, although they have the same Zacks Rank. MCK’s style score of ‘A’ indicates a strong growth prospect, along with an attractive valuation. However, CAH’s style score of ‘C’ reflects its attractive valuation but low growth potential going forward. Based on the Zacks style score, along with stronger improvement in sales and EPS growth estimates, MCK turns out to be a better choice for investors at present.
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MCK vs. CAH: Which Drug Distribution Giant Has the Healthier Outlook?
McKesson (MCK - Free Report) and Cardinal Health (CAH - Free Report) are two of the largest healthcare distribution companies in the United States, playing a critical role in the pharmaceutical supply chain. As essential intermediaries between drug manufacturers and healthcare providers, both companies benefit from consistent demand and long-term industry tailwinds.
However, with evolving healthcare regulations, inflationary pressures and shifting margins, investors may wonder which stock offers stronger upside potential right now. While both firms boast solid fundamentals and nationwide scale, their recent financial performance and strategic positioning tell a different story. In this faceoff, we’ll examine which healthcare distributor stands out as the better investment opportunity today.
Financial Comparison
McKesson reported fourth-quarter fiscal 2025 adjusted earnings per share (EPS) of $10.12, which beat the Zacks Consensus Estimate of $9.81 by 3.2%. The bottom line improved 63.8% on a year-over-year basis on the back of strength in core pharmaceutical distribution business, expansion of the Oncology platform and continued growth of differentiated biopharma solutions.
Image Source: Zacks Investment Research
In contrast, Cardinal Health reported third-quarter fiscal 2025 adjusted EPS of $2.35, which beat the Zacks Consensus Estimate of $2.15 by 9.3%. The bottom line also improved 12.4% year over year, primarily driven by strong demand for its Pharmaceutical and Specialty solutions.
How Do Estimates Compare for MCK & CAH?
The Zacks Consensus Estimate for MCK’s fiscal 2026 sales and EPS implies a year-over-year improvement of 12.4% and 12.3%, respectively. EPS estimates for fiscal 2026 have improved 1.4% over the past 60 days.
MCK Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CAH’s 2025 sales and EPS implies a year-over-year decline of 1.7% and an improvement of 7.8%, respectively. However, EPS estimates for 2025 have improved 2.3% over the past 30 days.
CAH Estimate Movement
Image Source: Zacks Investment Research
Diversification Boosts MCK’s Prospect
McKesson heads into the second half of 2025 with a strong operational and financial foundation, making it a compelling option for investors seeking defensive exposure to the healthcare sector. The company has steadily evolved beyond traditional drug distribution by expanding into higher-margin areas such as oncology, biopharma services and healthcare technology solutions. This diversification strategy not only supports margin stability but also positions McKesson to benefit from the growing complexity of pharmaceutical care and demand for data-driven services.
In its most recent earnings report, McKesson demonstrated solid revenue growth, stable margins and robust free cash flow generation. The company continues to reward shareholders through consistent share repurchases and dividend increases, reflecting confidence in its long-term strategy. Moreover, demand tailwinds from an aging U.S. population and rising prescription volumes support a steady outlook for 2025.
However, regulatory headwinds, particularly those surrounding drug pricing and reimbursement policy, remain a key risk for the business. Nonetheless, McKesson’s scale, operational discipline and focus on innovation give it an edge in a competitive landscape.
Medical Segment: Key to CAH’s Growth
Cardinal Health’s prospects in the rest of 2025 are likely to be driven by renewed investor optimism following a series of strategic improvements aimed at revitalizing its business model. After facing margin pressures and operational challenges in recent years, the company has shifted focus toward efficiency gains, cost controls and expanding its higher-growth medical segment. Its Pharmaceutical segment continues to provide scale and revenue consistency, while the Medical segment is expected to be a key growth driver, supported by increased demand for surgical and laboratory products.
CAH’s first-quarter performance showed strong revenue growth and improving profitability, especially as management executed its cost-saving initiatives.
Its strategic transformation, improving margin profile and exposure to key healthcare trends present a promising outlook. However, like McKesson, CAH faces external risks from drug pricing policy shifts and reimbursement rate volatility.
MCK & CAH: Price Performance & Valuation
So far this year, shares of both McKesson and Cardinal Health have been impressive, with MCK slightly underperforming CAH. The rise in the share price of both companies is likely due to the increasing demand for drug retailing, especially GLP-1 drugs. Shares of MCK and CAH have surged 25.7% and 29.2%, respectively.
Image Source: Zacks Investment Research
MCK or CAH: Which Is a Better Pick?
Both McKesson and Cardinal Health have a Zacks Rank #3 (Hold) at present, which makes it difficult to choose one of them. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Style Score can help investors make a prudent choice, although they have the same Zacks Rank. MCK’s style score of ‘A’ indicates a strong growth prospect, along with an attractive valuation. However, CAH’s style score of ‘C’ reflects its attractive valuation but low growth potential going forward. Based on the Zacks style score, along with stronger improvement in sales and EPS growth estimates, MCK turns out to be a better choice for investors at present.