Investment loss hurts earnings

Article Excerpt

MCKESSON CORP. $380 is a buy. The wholesale drug distributor (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 141.8 million; Market cap: $53.9 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.mckesson.com) reported 5.4% higher revenue for its fiscal 2023 second quarter, ended September 30, 2022, to $70.16 billion from $66.58 billion a year earlier. However, earnings fell 8.8%, to $874 million from $958 million. That’s due to a $3 million loss at its Ventures unit, which invests in smaller healthcare firms. In the year-earlier quarter, it contributed $97 million to earnings. Due to fewer shares outstanding, per-share earnings dipped 1.5%, to $6.06 from $6.15. For all of fiscal 2023, McKesson’s earnings will probably rise 5% to $24.77 a share, and the stock trades at an attractive 15.3 times that forecast. The $2.16 dividend yields 0.6%. McKesson is a buy. buy…