Chemed (CHE) and Acadia Healthcare (ACHC) Head to Head Survey

Chemed (NYSE: CHE) and Acadia Healthcare (NASDAQ:ACHC) are both mid-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Dividends

Chemed pays an annual dividend of $1.12 per share and has a dividend yield of 0.5%. Acadia Healthcare does not pay a dividend. Chemed pays out 24.9% of its earnings in the form of a dividend. Chemed has increased its dividend for 8 consecutive years.

Earnings and Valuation

This table compares Chemed and Acadia Healthcare’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chemed $1.58 billion 2.44 $108.74 million $4.50 53.55
Acadia Healthcare $2.85 billion 0.98 $6.14 million $1.96 16.25

Chemed has higher earnings, but lower revenue than Acadia Healthcare. Acadia Healthcare is trading at a lower price-to-earnings ratio than Chemed, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Chemed and Acadia Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chemed 4.62% 27.69% 15.16%
Acadia Healthcare 6.07% 8.57% 3.22%

Institutional and Insider Ownership

97.7% of Chemed shares are owned by institutional investors. 4.9% of Chemed shares are owned by company insiders. Comparatively, 11.1% of Acadia Healthcare shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Chemed and Acadia Healthcare, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chemed 0 2 1 0 2.33
Acadia Healthcare 0 6 8 0 2.57

Chemed presently has a consensus target price of $228.50, suggesting a potential downside of 5.18%. Acadia Healthcare has a consensus target price of $43.83, suggesting a potential upside of 37.62%. Given Acadia Healthcare’s stronger consensus rating and higher probable upside, analysts plainly believe Acadia Healthcare is more favorable than Chemed.

Volatility and Risk

Chemed has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Acadia Healthcare has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Summary

Chemed beats Acadia Healthcare on 10 of the 17 factors compared between the two stocks.

About Chemed

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.

About Acadia Healthcare

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

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