Chemed Corp (NYSE: CHE)

Chemed Corporation purchases, operates and divests subsidiaries engaged in diverse business activities to maximize shareholder value. The company operates in two reportable segments: VITAS, which provides hospice and palliative care services, and Roto‑Rooter, which delivers plumbing, drain cleaning, excavation, water restoration and related services to residential and commercial customers.

Chemed generates revenue primarily from service fees in its two segments. VITAS earns revenue from hospice care reimbursed mainly by Medicare and Medicaid on a per diem basis, with over 95% of its revenue coming from those government programs. Roto‑Rooter derives revenue from plumbing and drain cleaning jobs, excavation, water restoration work, and from franchising its brand to independent operators, charging franchise fees and ongoing royalties.

The company operates through the following segments.

• VITAS: This segment provides hospice and palliative care services through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers, serving patients primarily under Medicare and Medicaid programs.

• Roto‑Rooter: This segment offers plumbing, drain cleaning, excavation, water restoration and related services to residential and commercial customers, and also franchises the Roto‑Rooter name to independent operators.

Within the hospice industry, VITAS is one of the nation’s largest providers, competing against numerous small community based hospices, regional and national hospice chains, hospitals, nursing homes and home health agencies. Its competitive advantages include scale, brand recognition, and a proven ability to meet complex Medicare conditions of participation. In the highly fragmented plumbing and drain cleaning market, Roto‑Rooter benefits from one of the most recognized trademarks in the United States, giving it an edge in name recognition, emergency service and service guarantees over many local and regional competitors.

VITAS serves Medicare and Medicaid beneficiaries, principally elderly patients receiving end of life care, while Roto‑Rooter serves a broad base of residential homeowners and commercial clients such as property managers, municipalities and businesses needing plumbing and drainage solutions.