Cincinnati-based Chemed Corp (NYSE:CHE) recently saw a notable transaction by its Executive Vice President, Spencer S. Lee. According to a filing with the Securities and Exchange Commission, Lee sold 1,000 shares of the company's capital stock on November 22, 2024, at a price of $565.71 per share. This transaction amounted to a total value of $565,710.
Following this sale, Lee holds 19,019 shares in the company. This move by a senior executive is closely watched by investors, as insider transactions can often provide insights into the executive's perspective on the company's future prospects. Chemed Corp operates in the home health care services sector and is known for its subsidiaries like Roto-Rooter and VITAS Healthcare.
In other recent news, Chemed Corporation has authorized an additional $300 million for stock repurchases, maintaining a consistent dividend of 50 cents per share. This move underscores Chemed's commitment to returning value to its shareholders. In addition to these financial strategies, Chemed reported mixed third-quarter results. The company's VITAS Healthcare segment showed significant growth with patient admissions increasing by 6.3% year-over-year to 16,775, and revenue rising by 17.3% to $391.4 million. However, the Roto-Rooter division experienced a 6.9% decline in revenue to $214.8 million.
In response to these developments, RBC Capital Markets adjusted its price target for Chemed to $633 while maintaining an Outperform rating. The firm highlighted the continued momentum in the patient census of the VITAS segment, supported by robust hiring within the company. However, the timing of a recovery in the residential services sector, particularly for Roto-Rooter, remains uncertain. Chemed has adjusted its full-year earnings per share guidance to $23-$23.15, reflecting these recent developments.
InvestingPro Insights
Chemed Corp's recent insider transaction by Executive Vice President Spencer S. Lee aligns with some interesting financial metrics and trends highlighted by InvestingPro. The company's market capitalization stands at $8.53 billion, reflecting its significant presence in the home health care services sector.
One InvestingPro Tip notes that Chemed's management has been aggressively buying back shares, which could be seen as a vote of confidence in the company's value. This strategy often aims to boost shareholder value, potentially offsetting the impact of insider sales like Lee's.
Another relevant InvestingPro Tip reveals that Chemed has maintained dividend payments for an impressive 54 consecutive years. This long-standing commitment to shareholder returns is further underscored by a 25% dividend growth over the last twelve months, although the current dividend yield is modest at 0.36%.
The company's financial health appears robust, with a revenue of $2.38 billion in the last twelve months as of Q3 2024, showing a 6.83% growth. Chemed's profitability is also noteworthy, with a gross profit margin of 35.66% and an operating income margin of 15.63% for the same period.
While these metrics paint a positive picture, it's worth noting that Chemed is trading at a relatively high P/E ratio of 28.59, which some investors might consider expensive. However, this should be balanced against the company's consistent performance and dividend history.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide deeper insights into Chemed's financial position and market performance.
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