Cardinal Health Redefines Growth Through Specialty and Services

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Cardinal Health, Inc. (NYSE:CAH) Among Top Performing Dividend Stocks in 2025

Cardinal Health, Inc. (NYSE:CAH) has emerged as one of the top-performing dividend stocks for 2025. The company's market-beating performance is a reflection of its strategic shift and strong execution. By focusing more on higher-margin areas such as specialty pharmaceuticals and managed services, the company has seen significant earnings growth. Analysts predict that this momentum will continue, with estimated earnings growth of 19.3% in FY 2026 and 12.6% in FY 2027.

This improved earnings performance has also had a positive impact on the company’s dividend policy. The payout ratio is currently at a modest 30.6%, which leaves room for flexibility. While future dividends are not guaranteed, the company has the option to return a larger share of profits to shareholders if it chooses. This flexibility is particularly important given the broader trends in the drug distribution industry, where rising sales of specialty medicines have contributed to stronger margins.

Specialty medicines target complex conditions such as rheumatoid arthritis and cancer, and they typically carry higher margins compared to traditional generic drugs. Additionally, the industry has benefited from the rise of biosimilars—lower-cost alternatives to complex biotech drugs. These factors have provided support to distributors like Cardinal Health, even as traditional generic drug prices face pressure from intense competition.

Strong Performance and Updated Outlook

Cardinal Health, Inc. (NYSE:CAH) recently raised its outlook for fiscal 2026. The company now expects adjusted earnings per share between $9.65 and $9.85, up from a prior range of $9.30 to $9.50. This 35-cent increase reflects a strong first-quarter performance and is supported by management's confidence in the company's current trajectory.

The updated forecast also takes into account the pending acquisition of Solaris Health, which is expected to close in early November. This acquisition is anticipated to contribute positively to the company’s financial performance in the coming years.

Overview of Cardinal Health’s Business Operations

As a global healthcare company, Cardinal Health, Inc. (NYSE:CAH) distributes pharmaceuticals and medical products, manufactures medical supplies, and provides a wide range of healthcare services. Its operations span multiple sectors within the healthcare industry, allowing it to adapt to changing market dynamics and maintain a competitive edge.

While the company shows promise as an investment, some investors may be looking for opportunities with even greater potential for returns. In particular, AI stocks are often considered as a more attractive option due to their high growth potential and limited downside risk. For those interested in exploring AI stocks with significant upside potential, there are reports available that highlight the cheapest AI stock with a 100x potential.

Additional Resources for Investors

For those interested in exploring other investment opportunities in the healthcare sector, there are several resources available. These include:

• 14 Best Pharma Dividend Stocks to Buy in 2026 – A list of pharmaceutical companies with strong dividend histories and promising growth prospects.
• 14 Best Dividend Aristocrats to Invest in Heading into 2026 – A selection of companies with a long history of increasing dividends, offering stability and long-term growth potential.