Community Health Systems (CYH) and Chemed (CHE) Head-To-Head Analysis

Community Health Systems (NYSE: CYH) and Chemed (NYSE:CHE) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Volatility & Risk

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Community Health Systems has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, Chemed has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Dividends

Chemed pays an annual dividend of $1.12 per share and has a dividend yield of 0.4%. Community Health Systems does not pay a dividend. Chemed pays out 20.9% of its earnings in the form of a dividend. Chemed has increased its dividend for 9 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Community Health Systems and Chemed, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Health Systems 6 9 0 0 1.60
Chemed 0 2 1 0 2.33

Community Health Systems presently has a consensus target price of $5.31, suggesting a potential upside of 38.22%. Chemed has a consensus target price of $266.50, suggesting a potential downside of 0.59%. Given Community Health Systems’ higher probable upside, equities research analysts plainly believe Community Health Systems is more favorable than Chemed.

Valuation and Earnings

This table compares Community Health Systems and Chemed’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Health Systems $15.35 billion 0.03 -$2.46 billion ($1.20) -3.20
Chemed $1.67 billion 2.60 $98.17 million $5.36 50.01

Chemed has lower revenue, but higher earnings than Community Health Systems. Community Health Systems 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 Community Health Systems and Chemed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Health Systems -16.01% -14.18% -0.63%
Chemed 5.89% 30.04% 16.40%

Institutional & Insider Ownership

94.7% of Community Health Systems shares are owned by institutional investors. Comparatively, 94.8% of Chemed shares are owned by institutional investors. 4.7% of Community Health Systems shares are owned by company insiders. Comparatively, 4.9% of Chemed shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Chemed beats Community Health Systems on 13 of the 17 factors compared between the two stocks.

Community Health Systems Company Profile

Community Health Systems, Inc., together with its subsidiaries, owns, leases, and operates general acute care hospitals in the United States. It offers general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric, and rehabilitation services, as well as skilled nursing and home care services. The company also provides outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, and ambulatory surgery centers. As of December 31, 2017, it owned or leased 125 hospitals, including 123 general acute care hospitals and 2 stand-alone rehabilitation or psychiatric hospitals with an aggregate of 20,850 licensed beds in 19 states. The company was founded in 1985 and is headquartered in Franklin, Tennessee.

Chemed Company Profile

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.

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