Air Methods Corp (NASDAQ: AIRM) and Chemed Corp. (NYSE:CHE) are both healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitabiliy.

Institutional and Insider Ownership

98.8% of Chemed Corp. shares are owned by institutional investors. 9.0% of Air Methods Corp shares are owned by company insiders. Comparatively, 5.3% of Chemed Corp. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Chemed Corp. pays an annual dividend of $1.04 per share and has a dividend yield of 0.5%. Air Methods Corp does not pay a dividend. Chemed Corp. pays out 15.2% of its earnings in the form of a dividend. Chemed Corp. has raised its dividend for 8 consecutive years.

Volatility and Risk

Air Methods Corp has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Chemed Corp. has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Air Methods Corp and Chemed Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Methods Corp 6.67% 14.18% 4.43%
Chemed Corp. 7.14% 24.62% 14.04%

Valuation and Earnings

This table compares Air Methods Corp and Chemed Corp.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Air Methods Corp N/A N/A N/A $2.59 16.58
Chemed Corp. $1.59 billion 2.06 $217.50 million $6.82 29.93

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

Analyst Ratings

This is a summary of current recommendations for Air Methods Corp and Chemed Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Methods Corp 0 3 2 0 2.40
Chemed Corp. 0 2 1 0 2.33

Air Methods Corp currently has a consensus target price of $45.00, suggesting a potential upside of 4.77%. Chemed Corp. has a consensus target price of $151.50, suggesting a potential downside of 25.79%. Given Air Methods Corp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Air Methods Corp is more favorable than Chemed Corp..

Summary

Chemed Corp. beats Air Methods Corp on 8 of the 14 factors compared between the two stocks.

Air Methods Corp Company Profile

Air Methods Corporation is engaged in providing air medical emergency transport services and systems throughout the United States. The Company’s segments include Air Medical Services (AMS), Tourism and United Rotorcraft (UR) Division. As of December 31, 2016, its AMS Division provided air medical transportation services in 41 states to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). It transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to skilled trauma centers or tertiary care centers. As of December 31, 2016, its Air Medical Services Division operated 394 helicopters and 31 fixed wing aircrafts under both Instrument Flight Rules (IFR) and Visual Flight Rules (VFR). As of December 31, 2016, its Tourism Division operated 63 helicopters and two fixed wing aircrafts.

Chemed Corp. 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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