Chemed Corporation’s CEO, Kevin McNamara, presented a mixed but cautiously optimistic outlook at the 2026 Jefferies Healthcare Services and Technology Conference, emphasizing the resilience of its hospice division Vitas while acknowledging headwinds in its plumbing subsidiary Roto-Rooter. The company’s stock closed at $506.47 on September 15, 2026, after a 1.52% drop in the regular session, trading between $365.20 and $557 over the past year. With a market capitalization of $6.59 billion and a trailing P/E ratio of 25.55, Chemed’s shares remain below the $600 level seen at the start of 2025, having recovered from a low of under $400 when activist investor Barington Capital acquired a stake of less than 0.5% of its shares. The company’s return on equity stood at 27%, reflecting strong financial health despite operational challenges in its non-healthcare segments.
Vitas, Chemed’s largest business, delivered strong performance, with guidance raised twice during 2026. The hospice provider generated over $35 million in excess Medicare cap cushion—a significant improvement over the $19 million Florida exposure it faced in 2025, which had previously triggered a 100-point stock drop and a $1 billion market value loss. Admissions for Vitas target a range of 42% to 44%, with neurological patients accounting for 7% of cases but representing a larger share of patient days due to longer stays. Cancer patients made up 26% of admissions, with 80% to 90% of those either dying or being discharged within six months. Vitas also reported that its combination of neuromuscular and cerebrovascular diagnoses resulted in about 59% of patient days, slightly above the national average of 56%.
The company secured $82 million in federal pandemic relief funds, all of which were allocated to worker vacation pay, hiring, and retention programs—none of which were factored into adjusted net income. Chemed added an additional $43 million to retention and hiring efforts beyond the relief funds, reinforcing its reputation as a top healthcare workplace in 2025 and 2026. Demographic trends support Vitas’s growth potential, with projections indicating that by 2030, one in five Americans will be over 65, and in Florida, that figure will reach one in four—a demographic shift known as the ‘silver tsunami.’
In contrast, Roto-Rooter’s plumbing services segment faces margin pressures driven by shifts in Google’s search algorithms. Free or organic leads have declined from nearly 60% to just under 40% over the past two years, while paid-lead costs rose from about $50 to $120 to $125 per lead. Free search visibility, which had historically exceeded 70%, has fluctuated between the low 20s and mid-30s. To adapt, Roto-Rooter centralizing water restoration billing led to the elimination of 33 jobs, while average job sizes increased by over $300, and collection rates improved by one percentage point. Despite these adjustments, service margins remain above 20% even at lower activity levels. The company’s full-year margin guidance for Roto-Rooter sits at 21.5% to 22.5%, a reset from historical mid-20s margins.
Chemed’s leadership underscored the divergent trajectories of its businesses. Joel Wherley, CEO of Vitas, described the hospice sector as ‘a very predictable business’ and reiterated that Vitas was ‘doing great and exceeding expectations.’ He also addressed concerns about diagnosis coding, stating there was ‘no significant delta’ compared to national averages. McNamara acknowledged that Roto-Rooter’s success remains tied to Google’s algorithms, noting, ‘We’re kind of at the mercy of Google. We just try and stay on top of them.’ He also emphasized the company’s core values, reminding teams daily that ‘we take care of each other’ takes precedence over patient care.
The conference underscored Chemed’s ability to navigate a duality of growth in its core healthcare business and operational adjustments in its diversified segments, reflecting broader trends in healthcare services and consumer-facing services amid evolving digital and demographic landscapes.
