NEW YORK (TheStreet) -- Based on the strong industry outlook, latest quarterly results and analysts' hold recommendations, these six home health care stocks have potential upsides ranging from 13% to 60%. On average, these stocks have buy recommendation of 28% and hold rating of 67%, based on a Bloomberg consensus.These stocks are listed in ascending order of upside potential. Upside is implied by average analysts' price targets. 6. Chemed ( CHE) operates through two segments: VITAS Group and the Roto-Rooter Group. VITAS focuses on hospice care for terminally ill patients, while Roto-Rooter provides plumbing and drain-cleaning services to both residential and commercial customers. For the second quarter of 2011, the company reported a 5.8% increase in revenue to $333 million, with the VITAS segment generating a revenue increase of 7.3%. The GAAP diluted earnings per share soared 14.6%, to 94 cents, during the quarter. Net income expanded to $20.3 million from $18.9 million in the second quarter of 2010. Net cash from operating activities doubled to $51.1 million from $20.3 million in the year-ago quarter. The company recently raised its quarterly dividend to 16 cents per share, up 14.3% from 14 cents paid in the second quarter of 2011. For full year, the company expects revenue growth of 7.5% to 8.5% in VITAS and 6.5% to 8.5% in Roto-Rooter. EPS, excluding non-cash expense for stock options, non-cash interest expense related to accounting for convertible debt and other items not indicative of ongoing operations, is estimated at $4.7 to $4.8, compared to adjusted earnings per diluted share of $4.17 in 2010. Of the seven analysts covering the stock, two recommend a buy and three suggest a hold. Data from Bloomberg has analysts forecasting the stock gaining 13.2%, to $65.33, in the upcoming 12 months.
In conclusion, the industry is growing. Health care spending in the U.S. is projected to surpass $1 trillion in 2011, growing faster than the GDP, as per a latest report cited in Today's Medical Developments. Meanwhile, the U.S. is experiencing a reduction in the number of hospitals and hospital beds. As a result, health care is getting more personal. There is a rapidly growing trend in the health care industry to develop and deploy smaller, sophisticated medical device technology for remote use. This has further catalyzed the shift from medical care in a hospital setting to home-based services, making life more convenient and less stressful for patients. In August 2011, though the non-farm payroll report from the U.S. showed zero growth in the job market, the health care industry added 29,700 positions. Within its sub-segments, robust job growth was recorded in home health care services, with the addition of 6,300 jobs. Nursing and residential care facilities also increased hiring in August, adding 3,900 jobs. As per the National Association for Home Care & Hospice, almost 12 million individuals received home-based health care from 33,000 providers as of 2010. Further, the NAHCH says annually 3.5 million Medicare beneficiaries receive home health care to recover from a serious injury or illness -- a significant cost saving when compared to popular care settings.