McKesson Touches Low
McKesson (MCK) operates through two business segments: Distribution and Technology Solutions. The Distribution segment distributes drugs and equipment, and health and beauty care products across North America and internationally. The Technology Solutions segment delivers clinical, patient care, financial, supply chain and strategic management software solutions, as well as connectivity, outsourcing and other services, including remote hosting and managed services, to healthcare organizations.
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McKesson (MCK) was founded in 1833, has its headquarters in San Francisco and employs 73,000 employees worldwide. They rank #11 on the Fortune 500 list. We are attracted to the steady growth in dividends, strong balance sheet, smooth and rising earnings over a long period of time and we like the fact that we are buying at a PE multiple of 12X when their earnings are expected to grow by 9% /yr.
Purple Chips 12 -18 month target: $200.00
LOW VALUATION IN MCKESSON AT $157.55 (MCK-US) FULL POSITION
PURPLE CHIPS TARGET: $200.00 POSITION SIZE: FULL (5.0%) P/E: 12.4X DIV: $1.12 (0.7%) MKT CAP: $35.8B Debt: $5B RETURN ON CAPITAL: 59.5% EARNINGS YIELD: 8.7% 5 YR EPS Growth rate*:9.0% P/E/G Ratio: 1.4X 2016 EPS: $12.57 2017 EST.: $13.54 2018 EST.: $14.64
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
