Critical Analysis: Select Medical Holdings Corporation (SEM) versus Chemed Corp. (CHE)
Select Medical Holdings Corporation (NYSE: SEM) and Chemed Corp. (NYSE:CHE) are both mid-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
This is a summary of recent ratings and recommmendations for Select Medical Holdings Corporation and Chemed Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Select Medical Holdings Corporation||1||2||3||0||2.33|
Select Medical Holdings Corporation currently has a consensus price target of $18.40, suggesting a potential upside of 0.82%. Chemed Corp. has a consensus price target of $214.50, suggesting a potential upside of 10.89%. Given Chemed Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe Chemed Corp. is more favorable than Select Medical Holdings Corporation.
Volatility and Risk
Select Medical Holdings Corporation has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, Chemed Corp. has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
Earnings & Valuation
This table compares Select Medical Holdings Corporation and Chemed Corp.’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Select Medical Holdings Corporation||$4.26 billion||0.57||$474.80 million||$0.64||28.52|
|Chemed Corp.||$1.62 billion||1.91||$226.52 million||$3.99||48.48|
Select Medical Holdings Corporation has higher revenue and earnings than Chemed Corp.. Select Medical Holdings Corporation is trading at a lower price-to-earnings ratio than Chemed Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Select Medical Holdings Corporation and Chemed Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Select Medical Holdings Corporation||1.95%||9.61%||1.84%|
Insider & Institutional Ownership
79.0% of Select Medical Holdings Corporation shares are owned by institutional investors. Comparatively, 97.0% of Chemed Corp. shares are owned by institutional investors. 19.9% of Select Medical Holdings Corporation shares are owned by insiders. Comparatively, 5.3% of Chemed Corp. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Chemed Corp. pays an annual dividend of $1.12 per share and has a dividend yield of 0.6%. Select Medical Holdings Corporation does not pay a dividend. Chemed Corp. pays out 28.1% of its earnings in the form of a dividend. Select Medical Holdings Corporation has increased its dividend for 8 consecutive years.
Chemed Corp. beats Select Medical Holdings Corporation on 9 of the 17 factors compared between the two stocks.
About Select Medical Holdings Corporation
Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.
About Chemed Corp.
Chemed Corporation purchases, operates and divests subsidiaries engaged in various business activities. The Company operates through two segments: the VITAS segment (VITAS) and the Roto-Rooter segment (Roto-Rooter). The Company’s VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers. VITAS is the provider of hospice services in an industry dominated primarily by small, non-profit, community-based hospices. VITAS provides hospice care to Medicare beneficiaries participating in these managed care programs. A portion of its VITAS business is operated in the state of Florida. The Roto-Rooter segment provides plumbing, drain cleaning, water restoration and other related services to both residential and commercial customers.
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