The $21 billion market cap McKesson Corporation (MCK) takes a middleman approach to the healthcare sector. This approach has provided strong growth in sales and earnings, growth that is projected to continue into the future.

McKesson provides healthcare products and services through two channels. Distribution services provides pharmaceutical wholesale and alternate channel drug sales, specialty medical supplies and services and medical equipment sales. Technology solutions provides revenue management and physician practice computer systems to different segments of the healthcare industry.

Corporate revenues are evenly split between the two segments. However, distribution solutions generates about 75 percent of McKesson's total gross profits.

McKesson completed the first half of the company's 2012 fiscal year on Sept. 30, 2011. Through the first six months of the fiscal year, revenues were up 9 percent to $60.2 billion from $55 billion. Adjusted net income was $2.90 per share, up from $2.35 in the first half of fiscal 2011.

The adjusted EPS of $1.63 for the second quarter was significantly better than the Wall Street consensus of $1.40. Full year earnings guidance is $6.19 to $6.39 compared to 2011 earnings of $5 per share.

Cash flow

McKesson generates serious cash flow, including $1.4 billion of cash from operations in the first six months of the fiscal year. At the end of the half the company had almost $4 billion in cash on the books.

In the last five years McKesson has deployed $15 billion of capital. Of this amount, $5.7 billion has gone into acquisitions and $6.5 billion to share buyback programs. Both uses should provide growing income per share results for investors.

After the most recent earnings release, the analysts at UBS reiterated their buy rating on MCK and increased their target price to $99 per share, 25 percent above the current share price. The analysts who follow McKesson almost universally agree, with either buy or overweight ratings on the stock.

The company next reports on Jan. 31.