In the competitive healthcare distribution sector, McKesson Corporation (MCK) and Cencora, Inc. (COR) stand out as industry leaders with extensive market reach and innovative strategies. Both companies play pivotal roles in pharmaceutical and medical product distribution across the U.S. and internationally, leveraging technology and service diversification to expand their footprints. This article will analyze these giants to identify which presents the most compelling investment opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between McKesson Corporation and Cencora, Inc. by providing an overview of these two companies and their main differences.
McKesson Corporation Overview
McKesson Corporation operates in the healthcare sector, providing a broad range of healthcare services primarily through four segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions. The company distributes pharmaceutical drugs and healthcare products, supports specialty practices, and offers technology and consulting services. Founded in 1833 and headquartered in Irving, Texas, McKesson has a market cap of $102B and employs approximately 44,000 people.
Cencora, Inc. Overview
Cencora, Inc., formerly known as AmerisourceBergen, is a healthcare company specializing in pharmaceutical sourcing and distribution. Its U.S. Healthcare Solutions segment serves hospitals, pharmacies, and clinics with pharmaceuticals, healthcare products, and related services. The International Healthcare Solutions segment focuses on global wholesale and commercialization services. Founded in 1871 and based in Conshohocken, Pennsylvania, Cencora has a market cap of $65B and about 47,000 employees.
Key similarities and differences
Both McKesson and Cencora operate in the medical distribution industry, serving healthcare providers with pharmaceuticals and related products both domestically and internationally. Each offers services beyond distribution, including technology solutions and consulting. However, McKesson emphasizes prescription technology and specialized practice support, while Cencora highlights its comprehensive healthcare solutions including clinical trial support, supply management software, and a focus on animal health markets. Their market caps and employee sizes differ, with McKesson being the larger of the two.
Income Statement Comparison
This table presents the key income statement metrics for McKesson Corporation and Cencora, Inc. for the most recent fiscal year available, facilitating a straightforward financial comparison.
| Metric | McKesson Corporation | Cencora, Inc. |
|---|---|---|
| Market Cap | 102B | 65B |
| Revenue | 359B | 321B |
| EBITDA | 5.25B | 3.60B |
| EBIT | 4.62B | 2.55B |
| Net Income | 3.30B | 1.55B |
| EPS | 25.86 | 8.02 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
McKesson Corporation
McKesson’s revenue rose steadily from $238B in 2021 to $359B in 2025, reflecting a 50.7% growth. Net income improved significantly from a loss of $4.5B in 2021 to $3.3B in 2025, with net margins expanding favorably over the period. The latest fiscal year saw revenue growth accelerate by 16.2%, EBIT up 14.5%, despite a slight dip in net margin by 5.6%.
Cencora, Inc.
Cencora’s revenue climbed from $214B in 2021 to $321B in 2025, showing consistent growth of 50.2%. Net income was more stable but grew modestly, reaching $1.55B in 2025. Margins remained largely neutral, with EBIT margin at 0.79%. The latest year featured solid gross profit growth of 17.2% and EBIT growth of 13.2%, though net margin declined by 5.8%.
Which one has the stronger fundamentals?
McKesson exhibits stronger fundamentals with higher net income growth (172.6% vs. 0.9%) and better net margin improvement over five years. It also shows more favorable one-year growth in revenue, EBIT, and EPS. Cencora’s growth is steadier but margin compression and lower net income gains weigh on its profile. Overall, McKesson’s income statement metrics present a more robust improvement trajectory.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for McKesson Corporation (MCK) and Cencora, Inc. (COR) based on their most recent fiscal year data.
| Ratios | McKesson Corporation (MCK) | Cencora, Inc. (COR) |
|---|---|---|
| ROE | -1.59% | 1.03% |
| ROIC | 23.30% | 9.66% |
| P/E | 26.0 | 39.0 |
| P/B | -41.3 | 40.2 |
| Current Ratio | 0.90 | 0.90 |
| Quick Ratio | 0.53 | 0.55 |
| D/E (Debt-to-Equity) | -3.56 | 5.08 |
| Debt-to-Assets | 9.83% | 10.0% |
| Interest Coverage | 17.1 | 9.0 |
| Asset Turnover | 4.78 | 4.20 |
| Fixed Asset Turnover | 83.8 | 126.6 |
| Payout ratio | 10.5% | 28.1% |
| Dividend yield | 0.40% | 0.72% |
Interpretation of the Ratios
McKesson Corporation
McKesson’s ratios present a mixed picture with strengths in return on invested capital (23.3%) and capital efficiency, but concerns arise from a negative return on equity (-158.87%) and low net margin (0.92%). Liquidity ratios are below 1, indicating potential short-term solvency issues. The company pays dividends with a low yield of 0.4%, supported by free cash flow, but payout sustainability should be monitored due to weak profitability.
Cencora, Inc.
Cencora shows favorable return on equity (103.06%) and solid interest coverage (8.75), yet suffers from weak net margin (0.48%) and an unfavorable price/book ratio (40.17). Liquidity ratios also fall below 1, which could signal working capital pressures. The dividend yield stands higher at 0.72%, but payout risks remain given moderate free cash flow and some unfavorable leverage metrics.
Which one has the best ratios?
McKesson holds a more favorable overall ratio profile (57.14% favorable) compared to Cencora (42.86%), especially in capital returns and leverage. However, McKesson’s negative return on equity and liquidity constraints are notable drawbacks. Cencora’s strong ROE contrasts with other weaknesses, resulting in a slightly unfavorable global assessment. Both companies exhibit areas of strength and concern.
Strategic Positioning
This section compares the strategic positioning of McKesson Corporation and Cencora, Inc., focusing on market position, key segments, and exposure to technological disruption:
McKesson Corporation
- Leading global healthcare distributor with strong US and international presence; moderate competitive pressure due to scale.
- Diverse segments including U.S. Pharmaceutical, International, Medical-Surgical, and Prescription Technology Solutions driving growth.
- Invests in Prescription Technology Solutions linking pharmacies and biopharma; moderate exposure to tech-driven healthcare logistics.
Cencora, Inc.
- Major pharmaceutical distributor in the US and internationally, facing competitive pressure in diversified healthcare services.
- Concentrated on Pharmaceutical Distribution with additional segments in animal health, commercialization, and consulting services.
- Provides supply management software and clinical trial support; moderate exposure to technological innovation in healthcare services.
McKesson Corporation vs Cencora, Inc. Positioning
McKesson’s diversified segments offer broad healthcare market coverage, including technology solutions, while Cencora is more concentrated in pharmaceutical distribution and specialized healthcare services. Diversification may provide McKesson with multiple revenue streams but requires managing complex operations. Cencora’s focused approach offers specialization but may limit market breadth.
Which has the best competitive advantage?
McKesson demonstrates a very favorable moat with growing ROIC and increasing profitability, indicating a durable competitive advantage. Cencora shows a slightly favorable moat with value creation but declining ROIC, suggesting a weaker competitive position relative to McKesson.
Stock Comparison
The stock price chart highlights significant bullish trends for both McKesson Corporation and Cencora, Inc. over the past 12 months, with strong gains and decelerating momentum as the year closes.
Trend Analysis
McKesson Corporation’s stock showed a 59.68% increase over the past year, indicating a bullish trend with decelerating price growth and a high volatility of 101.77. Recently, the trend slightly softened to a 1.8% gain.
Cencora, Inc. reported a 44.87% price increase over the same period, also bullish with deceleration and lower volatility at 40.3. Its recent trend showed a modest 0.9% gain with a slight downward slope.
Comparing both, McKesson delivered the highest market performance with a larger overall price increase and greater recent buyer dominance despite decelerating momentum.
Target Prices
Here is the consensus target price outlook from verified analysts for McKesson Corporation and Cencora, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| McKesson Corporation | 1000 | 772 | 910.4 |
| Cencora, Inc. | 415 | 330 | 375.86 |
Analysts expect McKesson’s stock to appreciate notably from its current price of 816.06, while Cencora’s consensus target also suggests upside potential above its 335.69 market price. Both stocks display analyst optimism relative to present valuations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for McKesson Corporation and Cencora, Inc.:
Rating Comparison
McKesson Corporation Rating
- Rating: C+ indicating a very favorable status overall.
- Discounted Cash Flow Score: 5, very favorable valuation metric.
- ROE Score: 1, very unfavorable, indicating low profitability.
- ROA Score: 3, moderate efficiency in asset utilization.
- Debt To Equity Score: 1, very unfavorable, high financial risk.
Cencora, Inc. Rating
- Rating: B indicating a very favorable status overall.
- Discounted Cash Flow Score: 5, also very favorable valuation.
- ROE Score: 5, very favorable, showing strong profitability.
- ROA Score: 3, moderate efficiency in asset utilization.
- Debt To Equity Score: 1, very unfavorable, similarly high risk.
Which one is the best rated?
Cencora, Inc. is better rated overall with a higher rating of B compared to McKesson’s C+. Cencora also shows superior profitability through a strong ROE score, while both share similar challenges in debt levels.
Scores Comparison
The comparison of McKesson Corporation and Cencora, Inc. scores is as follows:
McK Scores
- Altman Z-Score: 5.82, indicating a safe zone and low bankruptcy risk.
- Piotroski Score: 6, classified as average financial strength.
COR Scores
- Altman Z-Score: 4.87, indicating a safe zone and low bankruptcy risk.
- Piotroski Score: 7, classified as strong financial strength.
Which company has the best scores?
Both companies are in the safe zone according to their Altman Z-Scores, indicating low bankruptcy risk. Cencora, Inc. has a stronger Piotroski Score (7) compared to McKesson (6), suggesting better financial strength based on the provided data.
Grades Comparison
Here is a detailed comparison of the recent grades for McKesson Corporation and Cencora, Inc.:
McKesson Corporation Grades
The table below shows recent grades from leading financial institutions for McKesson Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Equal Weight | 2025-11-10 |
| Baird | Maintain | Outperform | 2025-11-06 |
| Morgan Stanley | Maintain | Overweight | 2025-11-06 |
| UBS | Maintain | Buy | 2025-11-06 |
| UBS | Maintain | Buy | 2025-10-27 |
| Jefferies | Maintain | Buy | 2025-10-14 |
| JP Morgan | Maintain | Overweight | 2025-09-26 |
| Morgan Stanley | Maintain | Overweight | 2025-09-24 |
| Evercore ISI Group | Maintain | Outperform | 2025-09-24 |
| TD Cowen | Maintain | Buy | 2025-09-24 |
McKesson’s grades predominantly range from Buy to Outperform, with some Equal Weight ratings, indicating a generally positive outlook with some caution.
Cencora, Inc. Grades
The following table presents recent grades for Cencora, Inc. from recognized grading companies:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B of A Securities | Maintain | Neutral | 2026-01-05 |
| Wells Fargo | Maintain | Overweight | 2025-11-11 |
| JP Morgan | Maintain | Overweight | 2025-11-11 |
| TD Cowen | Maintain | Buy | 2025-11-10 |
| UBS | Maintain | Buy | 2025-11-07 |
| Baird | Maintain | Outperform | 2025-11-06 |
| Mizuho | Maintain | Outperform | 2025-11-06 |
| Mizuho | Maintain | Outperform | 2025-10-30 |
| UBS | Maintain | Buy | 2025-10-27 |
| Mizuho | Maintain | Outperform | 2025-10-16 |
Cencora’s grades show a strong emphasis on Buy and Outperform ratings, with a single Neutral, reflecting a generally optimistic view from analysts.
Which company has the best grades?
Both McKesson Corporation and Cencora, Inc. hold a consensus “Buy” rating from multiple analysts. However, Cencora displays a higher frequency of Outperform and Buy ratings with fewer Hold or Neutral stances, suggesting slightly stronger analyst confidence. This can influence investor sentiment by indicating potentially higher expected performance or growth prospects for Cencora relative to McKesson.
Strengths and Weaknesses
Below is a comparison table highlighting the key strengths and weaknesses of McKesson Corporation (MCK) and Cencora, Inc. (COR) based on the most recent financial and operational data.
| Criterion | McKesson Corporation (MCK) | Cencora, Inc. (COR) |
|---|---|---|
| Diversification | Highly diversified with segments in U.S. Pharmaceutical (327B in 2025), International (14.7B), Medical-Surgical Solutions (11.4B), and Prescription Technology Solutions (5.2B). | Less diversified, primarily focused on Pharmaceutical Distribution (198B in 2021) with smaller segments in animal health and commercialization services. |
| Profitability | Strong ROIC at 23.3% (favorable), but low net margin 0.92% and negative ROE (-158.87%) indicate operational challenges. | Moderate ROIC at 9.66% (neutral), positive high ROE at 103.06%, but very low net margin of 0.48%. |
| Innovation | Moderate innovation focus through Prescription Technology Solutions segment; steady ROIC growth shows efficient capital use. | Limited innovation noted; declining ROIC trend suggests challenges in maintaining profitability. |
| Global presence | Significant U.S. and International operations with a large global footprint. | Primarily strong in pharmaceutical distribution, with global commercialization and animal health as supplementary areas. |
| Market Share | Large market share in pharmaceutical distribution and healthcare solutions, supported by diverse revenue streams. | Strong presence in pharmaceutical distribution but less diversified market share compared to McKesson. |
Key takeaways: McKesson shows a durable competitive advantage with growing profitability and strong diversification, though profitability margins need improvement. Cencora creates value but faces declining profitability and less diversification, warranting caution for risk-conscious investors.
Risk Analysis
Below is a comparative overview of key risks for McKesson Corporation (MCK) and Cencora, Inc. (COR) based on the most recent 2025 data:
| Metric | McKesson Corporation (MCK) | Cencora, Inc. (COR) |
|---|---|---|
| Market Risk | Low beta (0.41), stable healthcare sector exposure | Moderate beta (0.67), slightly higher volatility |
| Debt level | Low debt-to-assets (9.83%), favorable debt/equity ratio (-3.56) | Moderate debt-to-assets (10%), unfavorable debt/equity ratio (5.08) |
| Regulatory Risk | Moderate, operates mainly in US and 13 countries with healthcare regulations | Moderate to high, broader international exposure with complex regulatory environments |
| Operational Risk | Diversified segments, large workforce (44K), risk mitigated by scale | Diverse pharma distribution and services, larger workforce (47K), complexity in service lines |
| Environmental Risk | Healthcare sector exposure; moderate impact from sustainability regulations | Similar sector risks, with additional supply chain environmental scrutiny |
| Geopolitical Risk | Moderate, US-centric with some international presence | Higher, due to wider global commercialization and logistics operations |
In synthesis, both companies face moderate regulatory and geopolitical risks typical for large healthcare distributors. McKesson’s lower debt levels and stable market risk profile reduce financial vulnerability, while Cencora’s higher debt and broader international footprint increase exposure. McKesson’s strong operational scale offers resilience, but investors should monitor regulatory changes and global supply chain challenges closely as these are the most likely and impactful risk factors.
Which Stock to Choose?
McKesson Corporation (MCK) shows a favorable income evolution with 50.72% revenue growth over five years and a 172.59% net income increase. Its financial ratios are mostly favorable, including a strong ROIC of 23.3%, low debt levels, and a very favorable global ratios opinion, despite a negative ROE and some liquidity concerns. The company holds a very favorable moat rating and a strong credit rating of C+.
Cencora, Inc. (COR) exhibits moderate income growth with 50.16% revenue growth but only 0.92% net income increase over the period. Its financial ratios are mixed, with a favorable ROE of 103.06% but a higher debt-to-equity ratio and slightly unfavorable overall ratios opinion. COR’s moat evaluation is slightly favorable, reflecting value creation but declining profitability. The company has a favorable rating of B.
Investors focused on durable competitive advantage and value creation may find McKesson’s strong ROIC and stable moat appealing, while those prioritizing higher ROE and recent profitability might view Cencora as attractive despite some financial ratio weaknesses. Risk-averse investors could interpret McKesson’s position as more favorable due to stronger financial stability metrics.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of McKesson Corporation and Cencora, Inc. to enhance your investment decisions:
