McKesson dividend: payout and cash coverage
McKesson's dividend per share rose from $1.83 in FY2022 to $3.17 in FY2026. Free cash flow could broadly cover shareholder payments, but not those payments and the acquisition program together without other funding.
How much does McKesson pay per share over time?
The dividend per share rose from $1.83 in FY2022 to $3.17 in FY2026. That shows larger distributions, but a specialist tests them against multi-year cash generation after capital spending, settlements, acquisitions, and buybacks. The next question is whether the balance sheet can support those demands.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| − Dividends paid, per share | 3.07 | 2.69 | 2.34 | 2.05 | 1.80 |
| − Share buybacks, per share | 38.28 | 24.56 | 22.56 | 25.58 | 22.82 |
| Book value per share | -18.10 | ||||
| Diluted shares (average of the year), change | -3.1% | -4.5% | -5.7% | -7.7% | -4.0% |
What this means. Book value per share is negative because the company owes more than it owns on paper, partly after buying back many shares; this does not mean the share price is negative.
Does McKesson's cash cover its dividend?
Fiscal 2026 showed the strain. Free cash flow could broadly cover shareholder payments, but not those payments and the acquisition program together without other funding. Debt therefore helped bridge the gap, transferring part of future cash flow to lenders. Buybacks did reduce diluted shares from 125.5 million to 119.2 million, supporting per-share results without proving that every purchase was attractive.
Cash conversion asks how much accounting profit survives the movement of money through the business. Operating cash flow was about $6.2 billion in FY2026, after about $6.1 billion in FY2025. The five-year record supports a cash-generating business, although the uneven path means that one annual increase does not automatically prove better operations.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| − Dividends paid | 381 | 345 | 314 | 292 | 277 |
| − Share buybacks | 4,750 | 3,146 | 3,025 | 3,638 | 3,516 |
| − Acquisitions | 3,416 | 24 | 272 | 867 | 6 |
| + Debt issued | 11,237 | 15,584 | 20,955 | 9,447 | 11,690 |
| − Debt repaid | 10,454 | 15,605 | 20,252 | 9,724 | 12,840 |
| Paid to shareholders | 5,131 | 3,491 | 3,339 | 3,930 | 3,793 |
What this means. The company's free cash flow can include cash from businesses it has already sold, so it may not represent only the businesses it still owns.
What could change McKesson's dividend?
For the year to March 2027, management guides to adjusted EPS of $44.20–$45.00, adjusted operating-profit growth of 9%–13%, and $4,500–$4,900 million of free cash flow. It also plans $5,000 million of share repurchases. The weighted value is $858.14 in October 2027, a −12% return with dividends included, and $1,094.46 in October 2029, a +13% return with dividends included. The forecast assigns 30% probability to the bear case, 52% to the base case and 18% to the bull case.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 5,449 (4,868 / 5,702) | 5,936 (4,818 / 6,406) | 6,435 (4,827 / 7,183) |
| Shares (millions) | 115 (115 / 114) | 112 (114 / 110) | 110 (113 / 106) |
| Dividends per share | 3.90 (3.76 / 3.95) | 4.49 (3.81 / 4.74) | 5.16 (4.00 / 5.69) |
| Price to earnings | 19.00 (15.00 / 22.00) | 19.50 (14.00 / 24.00) | 20.00 (13.00 / 26.00) |
What this means. The price to earnings number shows how many dollars investors pay for each dollar of the company's yearly profit.
What is McKesson's dividend yield against its share price?
McKesson combines $402,387 million of FY2026 revenue with $2,551 million of net debt, but its key operating measure is the profit retained from each dollar handled. Operating cash flow was about $6.2 billion in FY2026 after about $6.1 billion in FY2025, with a $210 million LIFO credit in FY2026. The share price is $976.57, with a 19.3x next-twelve-month P/E, a 0.4% dividend yield and a 4.2% buyback yield.