Chemed Corp (CHE) stock analysis

P/E below its 5-year median

Chemed's P/E of 26.3 is below its own 5-year median of 28.5.

P/E above the industry

Chemed's P/E of 26.3 is above the Health Services median of 23.9.

EV/EBITDA below its 5-year median

Chemed's EV/EBITDA of 16.8 is below its 5-year median of 19.0.

P/B above the industry

Chemed's price-to-book of 8.32 is above the Health Services median of 3.52.

Trading above fair value

The share price of $550.62 is above our fair value estimate of $524.63.

Margin of safety under 20%

The price is 5.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 5.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 3.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 1.3% over the last twelve months, against a 5-year average of -3.7% a year.

Growing slower than the industry

Revenue grew 5.2% over the last twelve months; the Health Services median is 9.1%.

Guidance lowered

Chemed lowered its full year adjusted EBITDA margin outlook on Jul 28, 2026.

Gross margin improving

Gross margin was 33.5% over the last twelve months, against 33.0% a year earlier.

Return on equity over 15%

Return on equity was 29.1% over the last twelve months and averaged 30.3% over five years.

Return on capital over 10%

Return on invested capital was 27.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Chemed's return on equity of 29.1% is above the Health Services median of 4.6%.

Earnings shrank over 5 years

Net income shrank 3.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 10.6% over the last twelve months, against a 5-year average of 11.8%.

Net margin above the industry

Chemed's net margin of 10.6% is above the Health Services median of -2.6%.

Low debt

Debt is 27.4% of shareholders' equity, under the 40% we consider low.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 154% of total debt.

Interest well covered

Operating income covers interest expense 75.4 times.

Short-term assets cover short-term debts

Current assets are 1.11 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 9.86; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Chemed paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Chemed yields 0.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 11.9% of net income.

Covered by free cash flow

Dividends take 11.4% of free cash flow.