Transcript
Introduction
Zack
I'm Zack Fuss and today we are breaking down Chemed. Chemed represents the union of two seemingly distinct businesses, End-of-Life Healthcare and Plumbing Services. As our guest Chadd so aptly puts it, old houses and old people. The two underlying businesses, VITAS and the widely recognized Roto-Rooter, both offer interesting stories in their own right.
The strength of this business has been its intentional and well-executed capital allocation strategy, which has resulted in a 21% EPS CAGR since 2003, which has resulted in a market cap of $8.5 billion and a net cash balance sheet. As mentioned, Chemed operates through two very distinct wholly owned subsidiaries that seem pretty far apart. On the one hand, you have VITAS Healthcare, a leading provider of end-of-life hospice care in the U.S. founded in 1978, and in the other, there's Roto-Rooter, the iconic plumbing, drain cleaning and water cleanup service provider whose roots go all the way back to 1935.