Chemed at UBS Global Healthcare Conference: growth offsets pressure

At the UBS Global Healthcare Conference on November 9, 2026, Chemed Corporation outlined the contrasting fortunes of its two main businesses: hospice care provider VITAS Healthcare and plumbing company Roto-Rooter. VITAS is experiencing strong hospice growth, while Roto-Rooter is facing margin pressure due to increased marketing costs and heightened competition from Google-related marketing costs.

VITAS Healthcare delivered a 12% revenue growth in 2026, with a 9.4% increase in average daily census, driven by a better mix of referrals and strong demand for hospice care. The company's long-term strategy of organic growth, share repurchases, and selective acquisitions has resulted in steady earnings growth over two decades, even as the business mix remains unique for a healthcare company.

VITAS has reduced shares outstanding from approximately 27 million to 13 million since 2004, contributing to per-share growth. Florida, which accounts for over 60% of VITAS's business, ended the government plan year with a $32 million Medicare cap cushion, indicating a strong position.

On the other hand, Roto-Rooter experienced a 7.5% sales growth in the latest quarter, but marketing expenses rose to 9% of sales year-to-date, a 200 basis point increase from previous levels. This decline in free leads due to Google's algorithm changes has increased paid search costs. The company expects VITAS growth to continue in 2027, while the outlook for Roto-Rooter hinges on whether marketing costs stabilize.

Both businesses have grown at just over 11% annually from 2004 to 2025, with Chemed's stock price increasing by about 20% annually during the same period.