New Lifetime High Reached: Chemed (CHE)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Chemed ( CHE) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Chemed as such a stock due to the following factors:

  • CHE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.6 million.
  • CHE has traded 1,405 shares today.
  • CHE is trading at a new lifetime high.

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More details on CHE:

Chemed Corporation provides hospice and palliative care services in the United States. It operates in 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. The stock currently has a dividend yield of 0.7%. CHE has a PE ratio of 21. Currently there is 1 analyst that rates Chemed a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Chemed has been 141,200 shares per day over the past 30 days. Chemed has a market cap of $2.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.81 and a short float of 19.8% with 27.08 days to cover. Shares are up 18.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Chemed as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.68% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CHE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CHEMED CORP has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHEMED CORP increased its bottom line by earning $5.58 versus $4.16 in the prior year. This year, the market expects an improvement in earnings ($6.63 versus $5.58).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 19.3% when compared to the same quarter one year prior, going from $20.57 million to $24.54 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.

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