Chemed Corp (CHE)

Chemed Corp.: A Comprehensive Overview

Company Profile:

Chemed Corp. (CHE) is a diversified healthcare company headquartered in Cincinnati, Ohio. Founded in 1953, Chemed operates through three primary business segments:

• Roto-Rooter: A leading provider of plumbing and drain cleaning services in North America, with over 400 company-owned and franchised locations.
• VITAS Healthcare: The nation's leading provider of end-of-life care, offering hospice and palliative care to patients in 49 states and the District of Columbia.
• Right at Home: A global franchise network of in-home care and assistance providers, focused on seniors and individuals with disabilities.

Chemed is led by CEO Kevin J. McNamara, supported by a strong leadership team with extensive experience in healthcare and business management. The company's corporate structure ensures operational efficiency and strategic alignment across its diverse businesses.

Top Products and Market Share:

Chemed's top products and services include:

• Plumbing and Drain Cleaning: Roto-Rooter holds the #1 market share in the North American plumbing and drain cleaning market, with over 10 million service calls annually.
• Hospice Care: VITAS Healthcare holds the #1 market share in the national hospice market, serving over 190,000 patients annually.
• In-Home Care: Right at Home operates over 600 franchises in 10 countries, providing in-home care to over 50,000 individuals annually.

Chemed's products and services dominate their respective markets, with combined market shares exceeding 40% in hospice care and over 20% in in-home care. Compared to competitors, Chemed consistently receives positive reviews and customer satisfaction ratings.

Total Addressable Market:

Chemed operates in a vast market with significant growth potential. The addressable market for plumbing and drain cleaning services in North America alone is estimated at $140 billion. The hospice and palliative care market is expected to reach $25 billion by 2027, while the global in-home care market is projected to surpass $521 billion by 2030.

Financial Performance:

Chemed's recent financial performance has been strong:

• Revenue: $2.68 billion in 2022, signifying a 14.2% increase compared to 2021.
• Net Income: $248.8 million in 2022, signifying a significant increase compared to 2021.
• Profit Margins: Gross profit margin of 45.2% and operating margin of 20.5% in 2022, demonstrating strong profitability.
• Earnings per Share (EPS): $2.46 in 2022, exhibiting a 17.8% increase compared to 2021.

Chemed consistently generates strong cash flow and maintains a healthy balance sheet with minimal debt.

Dividends and Shareholder Returns:

Chemed boasts a distinguished history of dividend payments and shareholder value creation:

• Dividend History: The company has paid uninterrupted dividends since 1977, currently offering a dividend yield of 1.3% and a payout ratio of 30.2%.
• Shareholder Returns: Cumulative total shareholder returns exceeded 250% over the past five years and 900% over the past ten years, outperforming the S&P 500 Index.

Growth Trajectory:

Chemed has a proven track record of sustained growth:

• Historical Growth: Revenue and net income have grown at an average rate of 10.2% and 12.5% over the past five years, respectively.
• Future Growth: The company anticipates continued growth through organic expansion and strategic acquisitions, with particular emphasis on expanding VITAS Healthcare and Right at Home's international footprint.

Market Dynamics:

Chemed's industry presents both opportunities and challenges:

• Opportunities: Aging population demographics, increasing demand for hospice and in-home care, technological advancements in healthcare service delivery.
• Challenges: Competiti