Pharmaceutical distribution in the United States is dominated by three firms: Cardinal Health CAH, McKesson MCK, and AmerisourceBergen ABC. AmerisourceBergen is the purest play on this narrow-moat industry. However when siphoning through the numbers one sees their is a big contrast in their stock valuations. Without getting into the Presidents medical proposals, one needs to focus on the value of the individual businesses themselves. All three are trading at reasonable valuations, but digging into the numbers a little deeper, Cardinal Health is clearly the cheaper stock. Cardinal is trading near its book value, while the other two are over 2x book value. Cardinal also offers a much more attractive dividend yield. Cardinal's P/E ratio is currently half the industry average. While all three hold a bright outlook going forward Cardinal seems to have a margin of safety already built into its share price. This is not to say that its stock price could not fall from current levels but that it is trading at a cheaper valuation than the other two companies. With the aging of the population in the United States their is still much upside in this industry and Cardinal offers you a dividend while you wait. 

AmerisourceBergen Corporation, a pharmaceutical services company, offers drug distribution and related services to health care providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. It distributes brand name and generic pharmaceuticals, over-the-counter health care products, home health care supplies and equipment, and related services to health care providers, such as acute care hospitals and health systems, independent and chain retail pharmacies, mail order facilities, physicians, medical clinics, and long-term care and other alternate site pharmacies.

Cardinal Health, Inc. provides health care products and services primarily in the United States. The company?s Health care Supply Chain Services segment distributes branded, private-label medical and laboratory, generic pharmaceutical, health care, and consumer products to retail customers, hospitals, and alternate care providers. It provides distribution, inventory management, data/reporting, new product launch support and contract, and charge back administration services, as well as operates a pharmaceutical repackaging and distribution program that offers repackaged pharmaceutical products.

McKesson Corporation, together with its subsidiaries, provides supply, information, and care management products and services for the health care industry. It operates through two segments, Distribution Solutions and Technology Solutions. The Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment, and health and beauty care products in North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers; sells pharmacy software; and provides consulting and outsourcing services. The Technology Solutions segment provides enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions; pharmacy automation for hospitals; and connectivity and outsourcing services.