CHE

Chemed is a high-quality, two-segment compounder — VITAS (the largest U.S. hospice provider) and Roto-Rooter (plumbing/drain services) — with an exceptional capital-return record. The franchise economics are strong: a 27.1% ROE, 13.4% operating margin, and very low leverage (0.57x liabilities/equity). Revenue grew 4.1% to $2.53B in FY2025, extending a steady multi-year climb, and the company generated $388M of operating cash flow against modest $62.8M capex.

The blemish in FY2025 is an earnings dip: net income fell 12.2% to $265M and EPS declined 7.8% to $18.34 (the EPS drop being cushioned by a 6.0% reduction in shares). Operating income slipped 7.7%, signaling some margin pressure across the segments — a pause in what had been steady growth (net income rose from $250M in FY2022 to $302M in FY2024 before this year's decline). The cause matters for the forward view, but the underlying cash generation and returns remain robust.