Chemed Corporation provides hospice and palliative care services in the United States. It operates through two segments, VITAS and Roto-Rooter. The company offers its services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers. It also provides plumbing, drain cleaning, water restoration, and other related services to residential and commercial customers. The company was founded in 1970 and is based in Cincinnati, Ohio.
CHE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for CHE, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Chemed Corp ranked in the 58th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 29.67% on a DCF basis. The most interesting components of our discounted cash flow analysis for Chemed Corp ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 106.08 -- which is good for besting 95.79% of its peer stocks (US stocks in the Healthcare sector with positive cash flow).
The business' balance sheet suggests that 2% of the company's capital is sourced from debt; this is greater than just 8.22% of the free cash flow producing stocks we're observing.
CHE's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 50.57% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Healthcare that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CHE, try HBIO, JAZZ, PBH, UTHR, and PRAH.
On CNBC's "Fast Money Halftime Report," the investment committee gave their final trades. Decatur Capital Management CEO Degas Wright likes Chemed Corporation (NYSE: CHE ). Sand Hill Global Advisors Brenda Vingiello likes CVS Health Corporation (NYSE: … Full story available on Benzinga.com