Chemed adds $300M to buyback; extends 54-year dividend streak
Cincinnati-based company allocates 4.5% of market cap to share repurchases while maintaining consistent shareholder returns
Chemed Corporation's board of directors authorized an additional $300 million for stock repurchases on Thursday, marking a significant capital allocation commitment that represents approximately 4.5% of the company's $6.7 billion market capitalization. The Cincinnati-based company, which operates hospice care provider VITAS Healthcare and plumbing services chain Roto-Rooter, also declared a quarterly dividend of 60 cents per share, maintaining its 54-year streak of consecutive dividend payments.
The shares rose 1.9% to $472.52 in Friday afternoon trading following the announcement. The quarterly dividend, payable March 13 to shareholders of record as of February 23, marks the 219th consecutive quarterly dividend in Chemed's history as a public company. The payout is consistent with the dividend paid in December 2025 and represents an annualized yield of approximately 0.54% at current prices.
"This additional $300 million authorization signals management's confidence in the intrinsic value of our business and our commitment to delivering shareholder returns," the company stated in its press release. The repurchase program will be funded through a combination of cash from operations and the company's revolving credit facility.
The authorization adds to Chemed's existing buyback program, which has seen significant activity in recent years. In 2024, the company spent $361.4 million on share repurchases, up dramatically from $67.7 million in 2023. During the quarter ending September 30, 2025, Chemed executed $180.8 million in buybacks, a 212.7% increase from the same period the prior year, according to finance data.
Analysts maintain a positive outlook on the stock, with a "Moderate Buy" consensus rating and an average 12-month price target of $555.50, according to MarketBeat. Of four analysts covering the company, one rates it a "Strong Buy" and three rate it a "Buy," with no "Hold" or "Sell" ratings.
The buyback announcement comes as Chemed's two business segments face different dynamics. VITAS Healthcare, which provides hospice services across 14 states and the District of Columbia, is "forecasting a brighter 2026" as the company works to mitigate payment cap liabilities, according to hospice industry reports. The segment recently received national attention when it was featured on CNBC's "Now We Know" program highlighting hospice care.
Roto-Rooter, the company's plumbing and drain services subsidiary, demonstrated resilience in its latest reported quarter with residential company-owned branch revenue growing 3.4% year-over-year in Q3 2025. However, the division faces operational challenges, including a class-action lawsuit filed in January 2026 and recent customer complaints regarding repair practices.
Chemed's financial metrics show a company trading at 23.9 times trailing earnings, with a forward price-to-earnings ratio of 17.9. The company has generated $2.53 billion in revenue over the trailing 12 months, with a profit margin of 11% and return on equity of 24.1%. Despite posting a 10.8% decline in quarterly earnings growth year-over-year, revenue grew 3.1% in the same period.
Institutional investors control approximately 96% of Chemed's outstanding shares, reflecting confidence from professional money managers in the company's long-term prospects. Recent quarterly filings show mixed activity among institutional holders, with some funds trimming positions while others increased stakes or established new positions in late 2025.
The company is scheduled to report fourth-quarter 2025 financial results on February 25, which will provide investors with updated insight into performance across both business segments and may offer guidance on how aggressively management intends to deploy the newly authorized repurchase capital.