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Here's Why You Should Invest in LHC Group (LHCG) Stock Now

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LHC Group, Inc. (LHCG - Free Report) is well-poised for growth on the back of a broad range of services, and prudent acquisition and joint ventures (JVs).

The stock has gained 52.4%, compared with the industry’s growth of 20.4% in a year’s time. Further, the S&P 500 Index rallied 18.3% in the same time frame.

The company — with a market capitalization of $6.92 billion — serves as a post-acute care partner for hospitals, physicians and families in the United States. It anticipates earnings to improve 14.1% over the next five years.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).

Key Catalysts

LHC Group has been offering a wide array of services through its diverse business segments. These, in turn, have been instrumental in driving the top line.

Within home health services arm, nurses, home health aides and therapists work closely with patients and their families to design and implement individualized treatment plans in accordance with a physician-prescribed plan of care. Increased acquisition activities in this space has helped the company gain a competitive edge.

Since the onset of the COVID-19, the company has been sourcing adequate PPE kits for patients and clinicians. These PPE kits include N95 mask, isolation gown, face shield, gloves, head and shoe covering, appropriate facemask, and a pair of gloves.

Additionally, LHC Group has been pursuing buyouts and JVs to drive inorganic expansion. The company’s pipeline of potential M&A growth opportunities remains robust and is well balanced between Home Health and Hospice.

On Aug 1, 2020, LHC Group finalized a JV with Orlando Health to boost home health and home and community based services (HCBS) in the state of Florida. The company anticipates the JV to account for almost $3.5 million in incremental annualized revenues. On Oct 1, 2020, the company finalized a JV with University Health Care System to bolster home health and hospice services in Georgia and South Carolina. The company anticipates this JV to generate almost $8.3 million in incremental annualized revenues. In the same month, the company finalized a JV with Northeast Georgia Health System in order to share ownership of SunCrest Home Health in Gainesville, GA.

On Nov 1, 2020, LHC Group finalized an expansion of JV with CHRISTUS Health via an agreement of adding a hospice provider in San Marcos, TX. The company anticipates this JV to generate almost $2.1 million in incremental annualized revenues.

Backed by the M&A pipeline and historic organic growth opportunity, the company remains optimistic and bullish on both organic and M&A growth opportunities for the remainder of 2020, 2021 and beyond.

Which Way are Estimates Headed?

For 2021, the Zacks Consensus Estimate for revenues is pegged at $2.22 billion, indicating growth of 7.5% from the previous year. The same for adjusted earnings per share stands at $5.98, suggesting an improvement of 19.4% from the year-ago reported figure.

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Becton, Dickinson has a projected long-term earnings growth rate of 9%.

Patterson Companies has an estimated long-term earnings growth rate of 9.6%.

IDEXX Laboratories has a projected long-term earnings growth rate of 15.8%.

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