SeekingAlpha MHS 7 Yr Earnings Price Correlation 06 30 2009

Medco, as a stand-alone company prior to being acquired by Merck & Co., had produced a legacy of consistent and profitable growth exceeding 20% per year. This has not changed after they were spun-off from Merck on August of 2003. Utilizing our Great Companies,Inc. fundamentals-at-a-glance research tool illuminates this point. Since once again becoming independent, Medco has compounded earnings at 22.4% right through the recession. Medco does have 40% debt as a percentage of capital much of which is attributed to a $2 billion one time dividend they paid to Merck which they financed. Medcos stock price has held up better than most through the recession. However, at their current PE ratio of 18.8 they are trading at a discount to their more normal PE ratio of 23 or higher.

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