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DaVita HealthCare Partners Inc. (DVA - Analyst Report) recently announced that it seeks to split its stock in a 2 for 1 ratio next month. Through this move the company intends to adjust its share price so as to make the shares affordable to the investors.  

Per the stock split, present DaVita shareholders will receive two shares for every share they own. The dividend shares of the company will be distributed on Sep 20, 2013, to shareholders of record as on Aug 23, 2013. As of Jun 30, 2013, the number of shares outstanding in DaVita’s portfolio was 106.2 million. Post the stock split, the number of shares will escalate to double the quantity to approximately 212.5 million.

As of Aug 9, 2013, DaVita traded at a share price of $114.35, that represents an approximately 5% increase year-to-date. The stock split is expected to trim down the share price to a more reasonable level. Lower share price will attract more investors thereby, raising demand for DaVita’s shares. We expect this to influence a greater number of investors to consider DaVita.

Be it stock split or share repurchases or dividend payouts, DaVita, the dialysis service provider, has always remained upfront in taking up strategic initiatives to gain investor confidence. The financial position of the company is also quite robust with operating cash flow increasing at a three year CAGR (2009–2012) of 18%. This allows the company to meet its capital expenditure needs. This is also expected to boost investor confidence further.

DaVita currently carries a Zacks Rank #3 (Hold). Other healthcare companies that are worth considering are Addus HomeCare Corporation (ADUS - Snapshot Report) and LCA–Vision Inc. with a Zacks Rank #1 (Strong Buy) and AmSurg Corp. (AMSG - Analyst Report) with a Zacks Rank #2 (Buy).

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