The Ensign Group, Inc.

The Ensign Group, Inc. (ENSG - Snapshot Report) looks well positioned to benefit from the aging domestic population. The analyst community is bullish on the company, with the next-year estimate projecting 20% earnings growth.

Company Description

The Ensign Group, Inc., through its healthcare facilities, provides nursing and rehabilitation care services in six Western states, including Arizona and California. Its services include nursing and assisted living programs and physical, occupational and speech therapies. The company was founded in 1999 and has a market cap of $347 million.

Third-Quarter Results

Ensign reported third-quarter results on Oct 31 that demonstrated the company's impressive growth trajectory. Revenue was up 12% from last year to $116.3 million, driven by strength in the company's skilled nursing division, where revenue was up 25% to $51.4 million.

Income came in at $6.8 million, up from $4.5 million last year. This produced earnings of 33 cents per share, ahead of last year's results but one penny shy of estimates.

Special Note

Ensign's results were negatively effected by California's budget problems, delaying regular payments for the company's services through Medicaid and Medicare reimbursements. This revenue will eventually arrive and retroactively hit the company's balance sheet.

Dividend Increase 12%

Ensign announced on Dec 22 that its Board of Directors has declared a quarterly cash dividend of $0.045 per share of Ensign common stock, an increase of 4 cents from the previous quarter. The dividend is payable on or before January 31, 2009 to shareholders of record as of December 31, 2008.

Strong Balance Sheet

Ensign has buffered itself against economic volatility and choppy credit markets by strengthening its balance sheet, noting that at the end of the quarter it had more than $55 million in cash reserves and about $60 million in debt.

Guidance and Estimates

After the solid results, Ensign went ahead and reaffirmed its previous full-year 2008 guidance, saying it expects revenue between $463 and $467 million and earnings between $1.30 and $1.35 per share.

Analysts are bullish on the company as well, with the next-year estimate pegged at $1.59 per share, a 20% earnings growth projection.

The Chart

Shares of ENSG have been rallying since mid November after bottoming out just above $11.50. Since then, this stock has risen above the $18.50 mark. The 52-week and all-time higher above $19 is now close at hand, take a look below.