McKesson Inc. Stock Buy Recommendation Reiterated (MCK)

NEW YORK (TheStreet) -- McKesson (NYSE:MCK) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:

• Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
• MCKESSON CORP has improved earnings per share by 39.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MCKESSON CORP increased its bottom line by earning $5.60 versus $4.29 in the prior year. This year, the market expects an improvement in earnings ($7.27 versus $5.60).
• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 32.9% when compared to the same quarter one year prior, rising from $286.00 million to $380.00 million.
• Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, MCKESSON CORP's return on equity exceeds that of both the industry average and the S&P 500.

McKesson Corporation, together with its subsidiaries, delivers pharmaceuticals, medical supplies, and health care information technologies to the healthcare industry primarily in the United States. It operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. The company has a P/E ratio of 14.6, equal to the average wholesale industry P/E ratioand below the S&P 500 P/E ratio of 17.7. McKesson has a market cap of $20.87 billion and is part of the services sector and wholesale industry. Shares are up 13.5% year to date as of the close of trading on Wednesday.

You can view the full McKesson Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on McKesson Inc. click any of the following:

• McKesson Inc. Stock Price

• McKesson Inc. Analyst Ratings

• McKesson Inc. Key Stats & Profile

• McKesson Inc. Earnings

• McKesson Inc. Ratio Comparison

• McKesson Inc. Growth Rates

• McKesson Inc. Balance Sheet

• McKesson Inc. Cash Flow

• McKesson Inc. Income Statement