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Cardinal Health Owner Earnings per Share (TTM)

: 1.66 (As of Sep. 2021)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Cardinal Health's Owner Earnings per Share (TTM) ended in Sep. 2021 was $1.66. It's Price-to-Owner-Earnings ratio for today is 28.67.


The historical rank and industry rank for Cardinal Health's Owner Earnings per Share (TTM) or its related term are showing as below:

NYSE:CAH' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 3.45   Med: 12.94   Max: 55.1
Current: 28.64

3.45
55.1

During the past 13 years, the highest Price-to-Owner-Earnings ratio of Cardinal Health was 55.10. The lowest was 3.45. And the median was 12.94.


NYSE:CAH's Price-to-Owner-Earnings is ranked higher than
57% of the 7 Companies
in the Medical Distribution industry.

( Industry Median: 20.90 vs. NYSE:CAH: 28.64 )

Cardinal Health's Earnings per Share (Diluted) for the three months ended in Sep. 2021 was $0.94. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 was $3.87. It's PE Ratio ratio for today is 12.30.

Cardinal Health's EPS without NRI for the three months ended in Sep. 2021 was $0.94. Its EPS without NRI for the trailing twelve months (TTM) ended in Sep. 2021 was $3.87. It's PE Ratio without NRI ratio for today is 12.30.


Cardinal Health Owner Earnings per Share (TTM) Historical Data

The historical data trend for Cardinal Health's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cardinal Health Annual Data
Trend Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.45 6.08 9.44 10.07 4.69

Cardinal Health Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.24 14.92 10.06 4.69 1.66

Competitive Comparison

For the Medical Distribution subindustry, Cardinal Health's Owner Earnings per Share (TTM), along with its competitors' market caps and Owner Earnings per Share (TTM) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Cardinal Health Owner Earnings per Share (TTM) Distribution

For the Medical Distribution industry and Healthcare sector, Cardinal Health's Owner Earnings per Share (TTM) distribution charts can be found below:

* The bar in red indicates where Cardinal Health's Owner Earnings per Share (TTM) falls into.



Cardinal Health Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Cardinal Health's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 1,135
Depreciation, Depletion and Amortization 746
Change In Deferred Tax 0
5Y Average of Maintenance Capital Expenditure 295
Change In Working Capital -1,106
Shares Outstanding (Diluted Average) 289

1. Start with "Net Income" from income statement. Cardinal Health's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was $1,135 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Cardinal Health's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Sep. 2021 was $746 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Cardinal Health's Change In Deferred Tax for the trailing twelve months (TTM) ended in Sep. 2021 was $0 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $295 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Cardinal Health's 5-Year Average Maintenance Capital Expenditure = $295 Mil

5. "Change In Working Capital" is from cashflow statement. Cardinal Health's Change In Working Capital for the trailing twelve months (TTM) ended in Sep. 2021 was $-1,106 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Cardinal Health's Shares Outstanding (Diluted Average) for the months ended in Sep. 2021 was 289.000 Mil.

Cardinal Health's Onwer Earnings Per Share for Sep. 2021 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 1135 +746+0
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-294.62260053994+-1106)/289.000
=1.66

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=47.60/1.66
=28.67

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Cardinal Health Owner Earnings per Share (TTM) Related Terms

Thank you for viewing the detailed overview of Cardinal Health's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.


Cardinal Health Business Description

Cardinal Health logo
Industry
Healthcare » Medical Distribution NAICS : 424210 SIC : 5122
Address
7000 Cardinal Place, Dublin, OH, USA, 43017
Cardinal Health is the third- largest global logistics provider engaged in wholesale pharmaceutical and medical products. Similar to its closest two peers, the company has evolved over time and has become entrenched in the sourcing and distribution of brand-name and generic pharmaceuticals and related services to hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, and physician offices. Through acquisitions, Cardinal Health has the ability to manufacture commodity products and certain medical devices.
Executives
Losh J Michael director H.B. FULLER COMPANY P.O. BOX 64683 ST. PAUL MN 55164-0683
Scarborough Dean A director 150 N. ORANGE GROVE BLVD PASADENA CA 91103
Snow Ola M officer: Chief Human Resources Officer 7000 CARDINAL PLACE DUBLIN OH 43017
Edison Sheri H. director 1069 STATE ROUTE 46 EAST BATESVILLE IN 47006
English Patricia M officer: Chief Accounting Officer 7000 CARDINAL PLACE DUBLIN OH 43017
Mason Stephen M officer: CEO, Medical Segment 7000 CARDINAL PLACE DUBLIN OH 43017
Mayer Jessica L officer: Chief Legal/Compliance Officer 7000 CARDINAL PLACE DUBLIN OH 43017
Rice Brian S officer: Chief Information Officer 7000 CARDINAL PLACE DUBLIN OH 43017
Holcomb Michele officer: EVP - Strategy & Corp. Dev. 7000 CARDINAL PLACE DUBLIN OH 43017
Hollar Jason M. officer: Chief Financial Officer 3333 BEVERLY ROAD HOFFMAN ESTATES IL 60179
Kaufmann Michael C director, officer: CEO 7000 CARDINAL PLACE DUBLIN OH 43017
Crawford Victor L. officer: CEO, Pharmaceutical Segment C/O THE PEPSI BOTTLING GROUP, INC. ONE PEPSI WAY SOMERS NY 10589
Laws Stuart G officer: SVP & Chief Accounting Officer CARDINAL HEALTH, INC. 7000 CARDINAL PLACE DUBLIN OH 43017
Evans David C director C/O THE SCOTTS MIRACLE-GRO COMPANY 14111 SCOTTSLAWN ROAD MARYSVILLE OH 43041
Darden Calvin director 11235 STROUP ROAD ROSWELL GA 30075

Cardinal Health Headlines

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