Chemed Raises Quarterly Dividend 16.7% to $0.70

Chemed Corporation increased its quarterly dividend to $0.70 per share from $0.60, a 16.7% raise that lifts the annualized payout to $2.80. The shares traded ex-dividend on August 17, 2026.

Why the dividend changed

Chemed’s board did not give a specific reason for the increase in its dividend declaration. The announcement was not tied to a stock split, merger, spin-off or special dividend. It followed a quarter in which the company raised its full-year guidance, mainly because its VITAS hospice operation performed better than management had expected.

Chemed reported that second-quarter revenue increased 8.8% to $673.3 million, while adjusted diluted earnings per share increased 41.9% to $6.06. VITAS generated an 11.9% increase in net patient revenue and a 20.6% increase in adjusted EBITDA excluding the Medicare Cap. Roto-Rooter revenue increased 3.3%, although its adjusted EBITDA was essentially flat. The operating figures point to VITAS as the principal source of incremental earnings capacity behind the higher payout. Chemed’s second-quarter results provide the underlying figures.

Management said VITAS returned to a normal growth pattern more quickly than anticipated after dealing with the 2025 Medicare Cap issue. Chemed raised its full-year adjusted earnings guidance to a range of $25.00 to $25.75 per diluted share. It also reported $40.2 million of cash and cash equivalents, $140.0 million of long-term debt and $262.7 million of undrawn borrowing capacity at June 30, 2026. Those resources supported several forms of capital deployment: Chemed repurchased 210,000 shares for $89.8 million during the quarter and retained approximately $139.8 million of repurchase authorization.

The increase is consistent with Chemed’s stated capital-allocation framework. A company investor presentation identifies increased dividends as a use of cash flow alongside hospice acquisitions, Roto-Rooter franchise purchases and share repurchases.

Dividend track record

The increase extends Chemed’s dividend-growth streak to 17 consecutive years. Its last annual cut occurred in 2000, placing the present record well beyond the disruption associated with that reduction.

Recent payments show a stair-step pattern. The quarterly amount was $0.50 for the ex-dividend dates of November 18, 2024, February 24, 2025 and May 29, 2025. It moved to $0.60 beginning with August 11, 2025 and remained there through May 28, 2026, before rising to $0.70 for August 17, 2026.

Full-year totals have increased without interruption in the recorded period, from $1.32 in 2020 to $1.40 in 2021, $1.48 in 2022, $1.56 in 2023, $1.80 in 2024 and $2.20 in 2025. Annual growth accelerated from 5.4% in 2023 to 15.4% in 2024 and 22.2% in 2025. Over five years, the dividend recorded 10.8% annual growth. The pattern shows that Chemed has favored periodic increases while keeping the payout small relative to earnings.

Is the dividend covered?

Chemed’s dividend consumes 12% of earnings. That low payout ratio leaves most earnings available for operations, acquisitions, debt service and share repurchases, while providing a substantial earnings buffer around the quarterly distribution.

SmarterDividends rates the dividend A with a safety score of 90. The grade means the dividend is considered very safe, within the score range of 80-100. The assessment is consistent with the low earnings payout ratio, the 17-year growth streak and the company’s continued access to liquidity. It does not eliminate operating risks, including Medicare reimbursement constraints at VITAS or weaker demand and higher marketing costs at Roto-Rooter.

Yield and valuation

At a share price of $496.57, Chemed’s forward dividend yield is 0.56%. That is well below the Healthcare sector median forward yield of 1.80%. The dividend therefore contributes relatively little current income despite its growth record. At the new annual rate, 100 shares produce $280.00 of annual dividend income.

SmarterDividends estimates fair value at $849.30 and classifies the shares as undervalued, representing 68% upside to that estimate. The stock has recorded a 16.9% one-year price gain. These valuation figures are separate from dividend safety: the A grade addresses the payout’s durability, while the fair-value estimate compares the share price with an assessment of underlying value.

What to watch

The next operating checkpoint is Chemed’s third-quarter report. Investors can compare VITAS admissions, patient census and Medicare Cap exposure with the assumptions behind the raised full-year guidance. The company’s second-quarter outlook called for VITAS growth to remain the main driver while Roto-Rooter’s full-year revenue growth and adjusted EBITDA margin expectations remained unchanged.

Capital allocation also warrants attention. Chemed is funding dividends alongside sizable share repurchases and potential acquisitions, using cash generation, balance-sheet liquidity and its revolving credit facility. Future disclosures on borrowing, repurchase activity and hospice or franchise purchases will show how management balances those uses of capital with the $2.80 annual dividend.