AGB 2021.14 - Chemed (CHE)

Two Good Businesses + Capital Allocation

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Chemed

“Capital deployment is probably the most underappreciated aspect of what a company can do to deliver real value to shareholders because that's about it. Creating value to shareholders by providing great care for our patients or services for our Roto-Rooter customers, that decides how well your stock is going to do and how much value you can create.” – Chief Financial Officer, David Patrick Williams at Deutsche Bank Health Care Conference May 2015

Chemed operates two distinct business entities. VITAS is the leading operator of hospice programs in the U.S. with 45+ programs across 14 states and Roto-Rooter is the leading operator and franchisor of plumbing and water restoration services covering 90% of the U.S. population and 40% of the Canadian population. There are very few synergies across the two businesses and each is operated separately for the most part. After doing weeks of research, the best explanation for…