Chemed Corporation (CHE) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Chemed Corporation (CHE) Healthcare & Pipeline Overview

Chemed Corporation, with a market cap of $6.72B, delivers hospice and palliative care via VITAS Healthcare, alongside plumbing and drain cleaning services through Roto-Rooter. Operating nationally, Chemed differentiates itself through its dual-segment strategy, blending healthcare with essential home services, and currently has a P/E ratio of 25.82.

What Is the Investment Thesis for CHE?

The VITAS Healthcare segment benefits from the increasing demand for hospice care driven by an aging population and a growing preference for end-of-life care at home. Roto-Rooter provides stability and consistent revenue through its essential plumbing and drain cleaning services. Key value drivers include continued expansion of VITAS into underserved markets, operational efficiencies within Roto-Rooter, and strategic capital allocation. The company’s profit margin of 10.2% and gross margin of 30.3% indicate solid profitability. A potential catalyst is the ongoing demographic shift favoring hospice care. However, risks include regulatory changes in healthcare and economic downturns affecting home services. The dividend yield of 0.54% offers a modest income component.

Based on FMP financials and quantitative analysis

CHE Key Highlights

Market Cap of $6.72B reflects Chemed's significant presence in the healthcare and home services sectors.

• P/E ratio of 25.82 indicates investor confidence in Chemed's earnings potential compared to the industry average.
• Profit Margin of 10.2% demonstrates Chemed's ability to generate profits from its revenue streams.
• Gross Margin of 30.3% highlights the efficiency of Chemed's operations in both VITAS Healthcare and Roto-Rooter.
• Beta of 0.48 suggests that Chemed's stock price is less volatile than the overall market, making it a relatively stable investment.

Who Are CHE's Competitors?

CHE is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are CHE's Key Strengths?

Strong market position in both hospice care and plumbing services.

• Diversified revenue streams through VITAS Healthcare and Roto-Rooter.
• Established brand reputation and customer loyalty.
• Experienced management team with a proven track record.

What Are CHE's Weaknesses?

Exposure to regulatory changes in the healthcare industry.

• Dependence on Medicare and Medicaid reimbursement for VITAS Healthcare.
• Potential for economic downturns to affect demand for Roto-Rooter's services.
• Competition from other hospice care providers and plumbing service companies.

What Could Drive CHE Stock Higher?

Aging population driving increased demand for hospice care services provided by VITAS Healthcare.

• Continued expansion of Roto-Rooter's service offerings and geographic reach.
• Potential for strategic acquisitions to expand Chemed's market presence.
• Leveraging technology to improve operational efficiency and customer service in both segments.

What Are the Key Risks for CHE?

Inconsistent delivery — missed Wall Street EPS estimates in 4 of the last 8 reported quarters.

• Insider selling — insiders were net sellers of roughly $18.8M recently.
• Changes in government regulations affecting hospice care reimbursement rates.
• Increased competition from other healthcare providers and plumbing service companies.
• Economic downturns reducing demand for home services provided by Roto-Rooter.
• Potential for litigation and liability claims related to healthcare services.

What Are the Growth Opportunities for CHE?

• Expansion of VITAS Healthcare into Underserved Markets: VITAS Healthcare has the opportunity to expand its hospice services into geographic areas with limited access to palliative care. This expansion can be achieved through strategic acquisitions, partnerships with local healthcare providers, and the establishment of new facilities. The market for hospice care is expected to grow as the population ages, presenting a significant opportunity for VITAS to increase its market share and revenue. Timeline: Ongoing.
• Enhancement of Roto-Rooter's Service Offerings: Roto-Rooter can enhance its service offerings by incorporating new technologies and expanding into related home services, such as water restoration and excavation. This diversification can attract new customers and increase revenue per customer. The market for home services is large and fragmented, providing ample opportunities for Roto-Rooter to grow its business. Timeline: Ongoing.
• Strategic Acquisitions in the Healthcare Sector: Chemed can pursue strategic acquisitions of smaller hospice care providers to expand its geographic footprint and service capabilities. These acquisitions can provide access to new markets, technologies, and talent, enhancing Chemed's competitive position in the healthcare sector. The market for hospice care is consolidating, creating opportunities for Chemed to acquire attractive targets. Timeline: Ongoing.
• Leveraging Technology to Improve Efficiency: Chemed can leverage technology to improve the efficiency of its operations in both VITAS Healthcare and Roto-Rooter. This includes implementing electronic health records, using data analytics to optimize resource allocation, and developing mobile applications to improve customer service. The adoption of technology can reduce costs, improve quality, and enhance customer satisfaction. Timeline: Ongoing.
• Partnerships with Healthcare Systems: VITAS Healthcare can form partnerships with hospitals, nursing homes, and other healthcare systems to provide integrated hospice care services. These partnerships can provide access to a larger patient population and improve the coordination of care. The healthcare industry is increasingly focused on integrated care models, creating opportunities for VITAS to collaborate with other providers. Timeline: Ongoing.

What Are CHE's Competitive Advantages?

• VITAS Healthcare has a strong brand reputation and established relationships with healthcare providers, creating a barrier to entry.
• Roto-Rooter has a well-known brand and a large network of company-owned branches and franchisees, providing a competitive advantage.
• The dual-segment strategy provides diversification and resilience, reducing the company's reliance on any single market.

What Does CHE Do?

Chemed Corporation, established in 1970 and headquartered in Cincinnati, Ohio, operates as a diversified services company with a primary focus on healthcare and home services. The company's VITAS Healthcare segment provides hospice and palliative care to patients facing life-limiting illnesses, utilizing a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers. VITAS delivers compassionate care, focusing on enhancing the quality of life for patients and their families across the United States. Complementing its healthcare operations, Chemed's Roto-Rooter segment offers plumbing, drain cleaning, excavation, water restoration, and related services to residential and commercial customers. Roto-Rooter operates through company-owned branches, independent contractors, and franchisees, providing essential home maintenance solutions. Chemed's dual-segment strategy allows it to participate in both the growing healthcare market and the stable home services sector, providing diversification and resilience. With a history spanning over five decades, Chemed has evolved into a leading provider in both hospice care and plumbing services, demonstrating its commitment to quality and customer satisfaction. The company's ability to manage and grow both segments underscores its operational expertise and strategic vision.

What Products and Services Does CHE Offer?

• Provides hospice and palliative care services through VITAS Healthcare.
• Offers plumbing and drain cleaning services through Roto-Rooter.
• Employs physicians, registered nurses, and home health aides to deliver hospice care.
• Utilizes company-owned branches, independent contractors, and franchisees for Roto-Rooter operations.
• Focuses on enhancing the quality of life for patients and their families.
• Provides essential home maintenance solutions to residential and commercial customers.
• Offers water restoration and excavation services as part of Roto-Rooter's offerings.

How Does CHE Make Money?

• VITAS Healthcare generates revenue through providing hospice and palliative care services, reimbursed by Medicare, Medicaid, and private insurance.
• Roto-Rooter generates revenue through providing plumbing, drain cleaning, and related services to residential and commercial customers.
• The company operates through a combination of company-owned branches, independent contractors, and franchisees.

What Industry Does CHE Operate In?

Chemed Corporation operates within the healthcare and home services industries. The healthcare sector, particularly hospice care, is experiencing growth due to the aging population and increasing preference for palliative care. The home services industry, including plumbing and drain cleaning, remains stable due to the essential nature of these services. Chemed's dual-segment strategy allows it to capitalize on both trends. Competitors in the healthcare space include DaVita Inc. (DVA) and BrightSpring Health Services, Inc. (BTSG), while the home services market is more fragmented. Chemed's Roto-Rooter holds a strong position in its market. The overall healthcare market is projected to continue its growth trajectory, driven by demographic shifts and technological advancements.

Who Are CHE's Key Customers?

• VITAS Healthcare serves patients with life-limiting illnesses and their families.
• Roto-Rooter serves residential customers requiring plumbing and drain cleaning services.
• Roto-Rooter serves commercial customers, including businesses and institutions, needing plumbing and drain cleaning services.

Over the past six months, Chemed Corporation insiders filed 25 SEC Form 4 transactions — 15 sales and 10 purchases. On net that is roughly 36K shares disposed (about $18.8M), a signal worth weighing alongside the fundamentals.

Chemed Corporation has missed Wall Street's EPS estimate in 4 of its last 8 reported quarters — a mixed record worth weighing. Reported results have landed about 0.8% below estimates on average.

Chemed Corporation's Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 10.45 places it in the safe zone, indicating low near-term bankruptcy risk.

Return on equity for Chemed Corporation stands at 25.3%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 16.9%, showing how much profit it generates from its asset base. CHE trades at a trailing price-to-earnings ratio of 25.82, above the Healthcare sector average of ~21.50x. Its free cash flow yield is 6.1%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.85 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 4.1%, the inverse of the P/E and a quick read on earnings relative to price.

Chemed Corporation (CHE) Valuation Context

Valued at $6.72B, CHE is classified as a mid-cap stock. Analyst price targets span from $475.00 to $633.00, with a consensus of $554.00. At the current price of $514.40, that implies approximately 8% upside potential. Relative to its peer group, CHE's quantitative score of 86/100 is above the peer average of 71/100.

CHE Revenue & Earnings Trend

In Q2 FY2026, CHE generated $673.3M in top-line revenue, marking a sequential increase of 2.4%. The company recorded net income of $67.7M, with diluted EPS of $5.04. Revenue has increased across the last three reported quarters, suggesting sustained momentum for this mid-cap Healthcare company. Across the four most recent quarters, CHE averaged $4.95 in diluted EPS.

Company Profile

Chemed Corporation operates in the Medical - Care Facilities industry within the Healthcare sector. It is headquartered in Cincinnati, US. The company is led by CEO Kevin J. McNamara. CHE has traded publicly since 1973.

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Common Questions About CHE (Healthcare)

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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