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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Chemed Corp. To summarize, we found that Chemed Corp ranked in the 38th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for CHE, they are:
Interest coverage, a measure of earnings relative to interest payments, is 58.69; that's higher than 91.24% of US stocks in the Healthcare sector that have positive free cash flow.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately only 6.85% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
CHE's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 61.26% 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 MCK, MDT, MD, PBH, and AMED.