As I recently alluded to in my Portfolio Thoughts (Mar. 2018) post, adding a few shares of Cardinal Health (CAH) was a possibility.

The stock price of CAH has been down, and up, and back down again in the past 6 months, as the pharmaceutical distributor has struggled to gain traction.  The business environment for CAH these days seems to be a bit uncertain.  Risks include possible government regulation with regard to drug pricing, and the seemingly endless overhang of possible competition from Amazon, among other things.

Despite this, I think CAH will be fine in the long-term, and so I’ve recently been looking to add a few shares in the low $60s, hoping to average down a bit, as well as reach the 100 share mark so that I could write covered calls on the stock if desired.

With some of the recent market turmoil, CAH dropped to a level that made me want to add.

Here are my purchase details…

CAH

On Monday, 3/26/18, I purchased 10 shares at $60.95/sh, for a total of $609.50.

The shares were yielding just over 3.03% at my purchase price.

I now hold 102.664 shares of CAH.  My cost basis is still a bit over $74 per share, so I’ll obviously need to see some price appreciation to get out of the red with this stock.

This purchase results in an additional $18.50 in annual forward dividend income, bringing my forward dividend total for CAH to $189.89, or $47.47 per quarterly payment.  Hopefully this dividend amount will rise soon, as CAH normally announces its dividend increase the first week of May.

One nice perk… I was able to pick up these shares a few days prior to the ex-dividend date, so the first dividend payment for these additional shares will show up next month!

CAH is now roughly the same weight in my Portfolio (around 2.2%) as another healthcare company, CVS Health (CVS).  This puts them both in the middle of the pack.

I suspect CAH may continue to move sideways in the near-term, as I don’t see any catalysts to help move the stock higher.  So, I’ll try to be patient and collect the dividends while I wait for a recovery.

Any thoughts on my CAH purchase price?  What do you make of the pharmaceutical distributors these days?  What’s going to get CAH moving to the upside?  I look forward to your comments!