CHE  Chemed Corp.

Exchange

NYSE

Sector

Health Care

Industry

Medical/Nursing Services

Market Cap.

3.04B

Vuru Grade

56.41/100

Current Price

$186.36
+0.63 (+0.34%)

Growth Price

$73.33
Overvalued by 60.65%

Stability Price

$49.28
Overvalued by 73.55%

Company Metrics

  • P/E 28.76
  • P/S 1.92
  • P/B 5.74
  • EPS 6.48
  • Cash ROIC 17.08%
  • Cash Ratio 0.09
  • Dividend 1.04 / 0.56%
  • Avg. Vol. 87,738.00
  • Shares 16.31M
  • Market Cap. 3.04B

Company Description

Chemed Corporation, through its subsidiaries, provides hospice care, and repair and cleaning services in the United States. The company operates in two segments, Vitas and Roto-Rooter. The Vitas segment offers hospice services to terminally ill patients. This segment provides hospice services in the areas of routine home care, general inpatient care, continuous care, and Medicare cap. It also offe... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

A Value Investor's Dream: Chemed Corporation
Seeking Alpha - Nov 5, 2013
Chemed Corporation (NYSE:CHE) is the parent company of two subsidies: 1) Roto-Rooter and 2) VITAS. Roto-Rooter operates through 110 company-owned branches and independent contractors, and over 400 franchisees.
News Chemed Corp.CHE
Wall Street Journal - Feb 11, 2011
News Chemed Corp.CHE. Significant News Only. 02/17/17; Press Release. Chemed Corporation Declares Quarterly Dividend of 26 Cents.
Chemed Corporation Risk Points versus Health Care
CML News - Mar 13, 2017
This is a scatter plot analysis of the critical risk points from the option market for Chemed Corporation (NYSE:CHE) compared to its own past and the Health Care ETF.
Chemed Corporation Announces the Retirement of Timothy S. O'Toole
Business Wire (press release) - Jun 8, 2016
CINCINNATI--(BUSINESS WIRE)--After more than a decade of leading VITAS Healthcare Corporation to become the single largest hospice provider in America, Chief Executive Officer Timothy S. O'Toole has decided to retire.
Cincinnati public company CEO exits - Cincinnati Business Courier
Chemed Corp. (CHE) Ex-Dividend Date Scheduled for February 23, 2017
Nasdaq - Feb 22, 2017
Chemed Corp. ( CHE ) will begin trading ex-dividend on February 23, 2017. A cash dividend payment of $0.26 per share is scheduled to be paid on March 20, 2017.
Chemed Corp. (CHE) Raised to “Buy” at Zacks Investment Research - Sports Perspectives
Stock Returns: Chemed Corporation (NYSE:CHE) is Beating CorVel Corporation ...
CML News - Mar 23, 2017
This is a snapshot to compare the stock returns for Chemed Corporation (NYSE:CHE) versus CorVel Corporation (NASDAQ:CRVL) .
Chemed (CHE) Reaches $186.37 52-Week High, Nomad Foods Limited (NOMD) Shorts ... - Herald KS
Chemed Corporation (NYSE:CHE) Valuation Review & Update
Business Review - Mar 24, 2017
Chemed Corporation (NYSE:CHE) has an ERP5 rank of 3074. The ERP5 Rank is an investment tool that analysts use to discover undervalued companies.
Chemed Corp. (CHE) Ex-Dividend Date Scheduled for November 09, 2016
Nasdaq - Nov 8, 2016
Chemed Corp. ( CHE ) will begin trading ex-dividend on November 09, 2016. A cash dividend payment of $0.26 per share is scheduled to be paid on December 05, 2016.
Stock Alert: Chemed Corporation Stock Volatility Hits A Rock Bottom Low
CML News - Mar 17, 2017
Before we cover the full analysis we make a quick alert here that Chemed Corporation (NYSE:CHE) has seen its stock price move at a rock bottom low level.
The Price Is Ahead Of Chemed
Seeking Alpha - Feb 9, 2016
Chemed Corp. gets its revenues from an unusual combination of businesses: hospice care and Roto Rooter. This is a company with a past track record of growing fundamentals, and there are some favorable company-specific opportunities going forward.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for CHE to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate CHE's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$186.36 Current Price

$73.33 Growth Price (DCF)

Overvalued by 60.65%


Growth Rate Assumed by Market: 34.05%


Future Free Cash Flow Growth Rate: 2.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$49.28 Stability Price (EPV)

Overvalued by 73.55%


Discount Rate: 15.0%

$109.26 Book Price

Overvalued by 41.37%


Excellent Cash Return on Invested Capital over the past 5 years

CHE has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

CHE has created $17.08 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 96.52M 121.52M 66.71M 127.37M 95.62M
divided by
Invested Capital 633.27M 445.30M 670.25M 666.26M 692.92M
Cash ROIC 15.24% 27.29% 9.95% 19.12% 13.80%

Excellent Return on Equity over the past 5 years

Over the past 5 years, CHE has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

CHE has generated $20.23 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 89.30M 77.23M 99.32M 110.27M 108.74M
divided by
Stockholders' Equity 453.29M 448.89M 451.36M 513.25M 524.10M
Return on Equity 19.70% 17.20% 22.00% 21.49% 20.75%

Excellent Business Performance over the past 10 years

CHE has been able to maintain profitability in good times and bad. This could mean CHE has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

CHE has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 72.94M 85.99M 139.34M 60.37M 144.75M 96.52M 121.52M 66.71M 127.37M 95.62M

Good Balance Sheet

CHE's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 4.99M 3.63M 112.42M 49.92M 38.08M 69.53M 84.42M 14.13M 14.73M 15.31M
Current Assets 139.41M 136.26M 198.26M 196.80M 150.75M 197.67M 224.66M 174.56M 150.81M 169.90M
Total Assets 772.31M 760.92M 819.47M 830.16M 795.91M 859.63M 893.70M 859.93M 852.33M 880.06M
Current Liabilities 152.83M 154.05M 136.08M 149.34M 145.40M 156.82M 363.99M 175.55M 171.34M 171.83M
Total Liabilities 407.96M 389.33M 342.31M 368.11M 382.22M 406.34M 444.81M 408.58M 339.07M 355.96M
Stockholder' Equity 364.35M 371.59M 477.16M 462.05M 413.68M 453.29M 448.89M 451.36M 513.25M 524.10M
Current Ratio 0.91 0.88 1.46 1.32 1.04 1.26 0.62 0.99 0.88 0.99
TL-to-TA 0.53 0.51 0.42 0.44 0.48 0.47 0.50 0.48 0.40 0.40

Consistent Reinvestment of Profits over the past 10 years

CHE has consistently retained profits. This may put CHE in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, CHE can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 278.34M 343.81M 403.37M 473.32M 546.76M 623.04M 686.11M 771.18M 865.85M 958.15M
Retained Earnings Growth - 23.52% 17.32% 17.34% 15.52% 13.95% 10.12% 12.40% 12.28% 10.66%

Competitive Industry over the past 10 years

CHE is likely operating in an industry with medium to low barriers to entry. This may mean that CHE doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that CHE invests heavily in R&D and Sales, General & Administrative expenses.

Only $6.35 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 63.98M 71.02M 73.78M 81.83M 85.98M 89.30M 77.23M 99.32M 110.27M 108.74M
divided by
Revenue 1.10B 1.15B 1.19B 1.28B 1.36B 1.43B 1.41B 1.46B 1.54B 1.58B
Net Profit Margin 5.82% 6.18% 6.20% 6.39% 6.34% 6.24% 5.46% 6.82% 7.14% 6.90%

Inconsistent Gross Profit Margins over the past 10 years

CHE has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$36.30 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 332.99M 338.39M 355.66M 374.53M 1.36B 396.72M 404.52M 421.61M 455.78M 461.45M
divided by
Revenue 1.10B 1.15B 1.19B 1.28B 1.36B 1.43B 1.41B 1.46B 1.54B 1.58B
Gross Margin 30.27% 29.45% 29.88% 29.25% 100.00% 27.74% 28.62% 28.95% 29.53% 29.26%

Medium Capital Intensity over the past 10 years

CHE has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

37.12% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 26.64M 26.09M 21.50M 25.64M 29.59M 35.25M 29.32M 43.57M 44.14M 39.77M
divided by
Net Income 63.98M 71.02M 73.78M 81.83M 85.98M 89.30M 77.23M 99.32M 110.27M 108.74M
Capital Expenditure Ratio 41.64% 36.74% 29.13% 31.33% 34.42% 39.47% 37.97% 43.87% 40.02% 36.57%

Very Strong Dividend History over the past 10 years

CHE has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests CHE is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 5.89M 5.54M 8.16M 11.88M 12.54M 13.03M 14.15M 14.26M 15.61M 16.44M
divided by
Shares Outstanding 25.08M 23.37M 22.74M 23.03M 20.95M 19.34M 18.59M 17.84M 17.42M 16.79M
Dividend Paid Per Share 0.23 0.24 0.36 0.52 0.60 0.67 0.76 0.80 0.90 0.98
Price at Year End 53.87 37.24 47.56 63.27 51.08 67.02 77.34 107.36 151.76 160.41
Dividend Yield 0.44% 0.64% 0.75% 0.82% 1.17% 1.01% 0.98% 0.74% 0.59% 0.61%

Strong History of Stock Buybacks over the past 10 years

CHE has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 25.08M 23.37M 22.74M 23.03M 20.95M 19.34M 18.59M 17.84M 17.42M 16.79M
Stock Bought Back - 7.29% 2.78% -1.25% 9.96% 8.30% 4.06% 4.18% 2.40% 3.77%
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