Chemed Corp. (CHE) stock is up over 12% between April 18 and May 17. The company, founded in 1970, is the owner of VITAS Healthcare and Roto Rooter plumbing and water cleanup services. The company's stock is trading at $332 a share on Thursday. The stock has risen 12% in the trailing 30-day period primarily on its earnings report.
The company released its earnings on April 19, signaling upbeat results and investor confidence.
Chemed Corp.'s shares have outperformed the industry, rising 30.1% in the past 90-day period with a market cap of $5.26 billion. The drain cleaning and health care company has delivered an average earnings beat over the past four quarters of 9.6%.
Zacks rates the stock as the No. 2 attractive stock for investors as the company revised its expected earnings, with no investors revising earnings downward in the past 60-day period.
Revenue increased in the first quarter, ended March 31, by 8.2% to $439 million. The company's VITAS segment posted a revenue increase of 3.4%, rising to $292 million in revenue in the first quarter. The company's net income also rose a staggering 55.4% to $32.0 million with an adjusted Ebitda of $44.7 million, up 16.3%.
Roto-Rooter, the company's draining cleaning and plumbing division, also saw steep increases in revenue, rising 19.1% on the quarter to $147 million. Net income also rose 56.9% to $22.9 million with adjusted EBITDA rising 28.7% to $33.9 million.
Reclassification of certain costs was mandated against the company by the Financial Accounting Standards Board, but the reclassification will not impact the company's net income nor its Ebitda.
The company's VITAS division benefited from Medicare reimbursement rate increases of 0.7% last quarter, and a reduction in Medicare Cap led to an additional 0.6% revenue gain. Average revenue per patient per day fell 1.2% to $189.76.
VITAS lowered its administrative expenses by 2.4% year-over-year to $20.5 million on the quarter.
Roto-Rooter's business benefited greatly from a 53.3% rise in the company's water restoration services, which rose $9.6 million to $27.7 million. Gross margins hit 47.5% in the first-quarter.
Chemed has debt of $143 million, with total cash equivalents of $14 million. The company also repurchased 300,000 shares at a value of $81.1 million, or a cost per share of $270.52. The board of directors has also authorized an additional $150 million to repurchase shares under the company's repurchase program.
Debt-capital ratio for Chemed is at 20.7%, far lower than the industry average of 42.6%. The company's annual earnings growth rate is also projected to be 30%, which outpaces the industry's 23.9% average.
Disclosure: The author does not have any stake in the listed equities.
