Critical Analysis: BioScrip (BIOS) vs. Chemed (CHE)

BioScrip (NASDAQ: BIOS) 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 earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for BioScrip and Chemed, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BioScrip 0 0 4 0 3.00
Chemed 0 2 1 0 2.33

BioScrip presently has a consensus price target of $3.56, indicating a potential upside of 40.26%. Chemed has a consensus price target of $266.50, indicating a potential downside of 20.19%. Given BioScrip’s stronger consensus rating and higher probable upside, analysts clearly believe BioScrip is more favorable than Chemed.

Institutional & Insider Ownership

84.5% of BioScrip shares are held by institutional investors. Comparatively, 95.5% of Chemed shares are held by institutional investors. 0.8% of BioScrip shares are held by company insiders. Comparatively, 4.9% of Chemed shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares BioScrip and Chemed’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BioScrip $817.19 million 0.40 -$64.19 million ($0.44) -5.77
Chemed $1.67 billion 3.19 $98.17 million $5.36 62.30

Chemed has higher revenue and earnings than BioScrip. BioScrip is trading at a lower price-to-earnings ratio than Chemed, indicating that it is currently the more affordable of the two stocks.

Dividends

Chemed pays an annual dividend of $1.12 per share and has a dividend yield of 0.3%. BioScrip 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.

Volatility & Risk

BioScrip has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Chemed has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares BioScrip and Chemed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BioScrip -9.23% N/A -8.77%
Chemed 6.67% 33.05% 17.97%

Summary

Chemed beats BioScrip on 13 of the 17 factors compared between the two stocks.

About BioScrip

BioScrip, Inc. provides infusion solutions in the United States. It engages in the preparation, delivery, administration, and clinical monitoring of pharmaceutical treatments that are administered to a patient through intravenous, subcutaneous, intramuscular, intra-spinal, and enteral methods. The company is primarily involved in the intravenous administration of medications to treat a range of acute and chronic conditions, such as infections, nutritional deficiencies, immunologic and neurologic disorders, cancer, pain, and palliative care. It also offers home nursing products and services to patients suffering from chronic and acute medical conditions. The company offers its services at patient's homes, outpatient clinics, nursing facilities, physician's offices, and ambulatory infusion centers. It markets and sells its products and services through sales and marketing representatives, and payor relationships. The company was founded in 1993 and is based in Denver, Colorado.

About Chemed

Chemed Corporation provides hospice and palliative care services in the United States. It operates through two segments, VITAS and Roto-Rooter. The VITAS segment offers direct medical services, as well as spiritual and emotional counseling services to terminally ill patients. This segment offers its services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers. The Roto-Rooter segment provides plumbing, drain cleaning, water restoration, and other related services to residential and commercial customers through company-owned and operated territories, independent contractor-operated territories, and franchised locations. This segment also manufactures and sells products and equipment, including drain cleaning machines and drain cleaning solutions. The company was founded in 1970 and is headquartered in Cincinnati, Ohio.

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