Critical Review: Chemed (CHE) and Its Peers

Chemed (NYSE:CHE) is one of 235 publicly-traded companies in the “Healthcare Providers & Services” industry, but how does it compare to its peers? We will compare Chemed to related businesses based on the strength of its dividends, profitability, risk, analyst recommendations, earnings, institutional ownership and valuation.

Earnings & Valuation

This table compares Chemed and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Chemed	$2.53 billion	$265.24 million	26.06
Chemed Competitors	$20.60 billion	$281.57 million	1.43

Chemed’s peers have higher revenue and earnings than Chemed. Chemed is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Chemed has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Chemed’s peers have a beta of 0.98, indicating that their average stock price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Chemed and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemed	0	5	1	0	2.17
Chemed Competitors	1792	7550	12972	788	2.55

Chemed currently has a consensus price target of $530.75, indicating a potential upside of 2.28%. As a group, “Healthcare Providers & Services” companies have a potential upside of 14.89%. Given Chemed’s peers stronger consensus rating and higher possible upside, analysts plainly believe Chemed has less favorable growth aspects than its peers.

Profitability

This table compares Chemed and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chemed	10.60%	31.77%	18.90%
Chemed Competitors	-7.69%	-139.74%	-1.50%

Institutional & Insider Ownership

95.8% of Chemed shares are owned by institutional investors. Comparatively, 56.9% of shares of all “Healthcare Providers & Services” companies are owned by institutional investors. 3.3% of Chemed shares are owned by insiders. Comparatively, 15.4% of shares of all “Healthcare Providers & Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Chemed pays an annual dividend of $2.80 per share and has a dividend yield of 0.5%. Chemed pays out 14.1% of its earnings in the form of a dividend. As a group, “Healthcare Providers & Services” companies pay a dividend yield of 1.6% and pay out 25.4% of their earnings in the form of a dividend. Chemed has increased its dividend for 16 consecutive years.

Summary

Chemed peers beat Chemed on 9 of the 15 factors compared.

Chemed Company Profile

Chemed Corporation provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers primarily in the United States. The company operates in VITAS and Roto-Rooter segments. It offers plumbing, drain cleaning, excavation, water restoration, and other related services to residential and commercial customers through company-owned branches, independent contractors, and franchisees. The company was incorporated in 1970 and is headquartered in Cincinnati, Ohio.