Financial News: How Does Your Hospice Grow?

From the Wall Street Journal:

Vitas is the largest provider of hospice services for patients with severe, life-limiting illnesses. The company has approximately 8% of the U.S. market for hospice services. Net revenue last quarter for the Vitas segment was $211 million, an increase of 6.2% over the prior year. Income was up 20.4% over the prior year to $17.2 million. According to MedPAC, Medicare spending on hospice services quadrupled between 1999 and 2007, from $2.4 billion to more than $10 billion. With the Obama stimulus package increasing the Medicare Hospice Wage Index in 1999, Chemed estimates this will add an additional $8 million in revenue to Vitas.

Two, depression-independent, enormous demographic trends in one company. The company also just doubled its dividend in August from six cents a share to 12 cents a share. Google: no dividend. Trading at just seven times Ebitda, with solid growth in front of it, I’d take Chemed over Google as a solid play over the next year.