McKesson (NYSE: MCK)
QVI Research Report | Updated Coverage | December 2023
Summary:
McKesson Corporation is the best of breed in the legal drug distributor oligopoly, equating to a long-term competitive position in the healthcare-dominated 21st century.
The company’s current wealth analysis uncovers favorable ratings in its value proposition, returns on management, and enterprise downside risks.
The stock price’s present value suggests that its shares are trading at a reasonably discounted stock price.
QVI maintains its Concentrated Stock Picks coverage rating of McKesson in this updated research report.
When referencing this research report, access your Quality Value Investing (QVI) Glossary of Investing Terms and Metric Targets. Unless noted, all data presented is sourced from Seeking Alpha Premium as of the market close on December 21, 2023, and intended for illustration only.
The 43 holdings in the QVI Real-Time Stock Picks portfolio have collectively achieved alpha for 14 years by focusing research and analysis on a company’s current wealth and its share price’s present value. In other words, just the facts without unreliable predictive analysis typical of the buyside or the business modeling overkill of sell-side Wall Street analysts.
In this updated QVI Research Report, we’ll look at the Concentrated Real-Time Stock Picks health care sector holding McKesson Corporation to see if it continues to meet Quality Value Investing’s active portfolio inclusion criteria based on our checklist analysis of the business’s current wealth and its stock’s present value.
McKesson: Company Current Wealth
To uncover the current wealth of the company, QVI defines the value proposition, measures select returns on management, and assesses enterprise downside risks.
Value Proposition
QVI Research Report’s value proposition section provides a brief synopsis of the company’s business model, major-exchange listing, stock symbol, market capitalization, and dividend-paying status. In addition, it defines the competitive advantages of a company’s products or services to its customers compared to the industry, including the stock’s historical performance vs. the sector and market.
Mckesson $MCK is a dividend-paying large-cap stock in the healthcare sector’s distributors industry. MCK was added to QVI’s Real-Time Stock Picks on March 6, 2018, at a split and dividend-adjusted $143.74 a share.
McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International.
The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies.
The RxTS segment serves biopharma and life sciences partners and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services.
The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies.
The International segment offers distribution and services to wholesale, institutional, and retail customers in Europe and Canada.
McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas., USA.
QVI’s value proposition elevator pitch for McKesson:
McKesson is the best of breed in the legal drug distributor oligopoly, which includes peers Cencora (COR) and Cardinal Health (CAH), equating to a long-term competitive position for MCK in the healthcare-dominated 21st century.
Due Diligence Resources
For a more in-depth analysis of the all-important value proposition, visit McKesson’s investor relations webpage and its most recent Form 10-K Annual Report submitted to the US Securities and Exchange Commission or SEC.
Performance vs. Sector and Market
The chart below illustrates McKesson’s performance against the Health Care Select Sector SPDR® Fund ETF (NYSE: XLV) and the SPDR® S&P 500 ETF Trust (NYSE: SPY) since being added to the QVI Concentrated Stock Picks on March 6, 2018. MCK has significantly outperformed its sector and the broader market during its first five+ years as a QVI holding.
QVI’s value proposition rating for McKesson: Bullish.
Next, we’ll look at the company’s returns on management and enterprise downsize risks, the share price’s present value, and the investment thesis.