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Encompass Health (EHC) Unveils Plans to Expand in Maryland

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Encompass Health Corporation (EHC - Free Report) recently disclosed plans to build an inpatient rehabilitation hospital in Bowie, MD. Equipped with 60 beds, the hospital is likely to start treating patients in the middle of 2022. Shares of the company have gained 0.2% as of Feb 19.

Consequent to commencement of operations, the hospital will provide physical, occupational and speech therapies. This is likely to provide much-needed relief to patients recovering from debilitating illnesses and injuries including strokes and other neurological disorders, brain injuries and spinal cord injuries. Notably, the establishment will provide 24-hour nursing care.

Notably, the company already has one inpatient rehabilitation hospital operating in Maryland. Being the company’s second hospital in the state, the hospital will cater to health issues of residents in southern Maryland more effectively. Following assimilation into the local healthcare system, the new hospital backed with enhanced rehabilitation technologies is likely to bank on escalating demand for improved rehabilitative services across the community.

Shares of Encompass Health have gained 30.4% in the past six months compared with the industry’s growth of 7.9%.

The need to address rehabilitation needs of individuals was further accelerated with rampant spread of the COVID-19 pandemic across the United States. Apart from getting proper treatment and medication, people susceptible to the virus were in urgent need for comprehensive rehabilitation services. The company has been striving to capitalize on the scenario as evident from its efforts to foray across different regions with enhanced rehabilitative care.

Throughout 2020, the healthcare provider has inaugurated hospitals and continued to unveil plans for constructing numerous inpatient rehabilitation hospitals across the nation. It has also entered into joint ventures (JVs) with renowned healthcare systems, which resulted in improved health outcomes across the regions. To name a few, the company formed a JV with UnityPoint Health – Trinity in January 2021 for construction of an inpatient rehabilitation hospital named The Quad Cities Rehabilitation Institute in Moline, IL. The other noteworthy JVs by Encompass Health in 2020 include BJC HealthCare and MUSC Health.

Moreover, back-to-back initiatives undertaken clearly highlight the expansion endeavors of Encompass Health, which has been the leading U.S. operator of inpatient rehabilitation hospitals. Case in point, the company presently operates 137 inpatient rehabilitation hospitals across the United States.

Furthermore, Encompass Health seems to be in no mood to slow down its expansion endeavors during 2021 as well. To date in 2021, it has pursued a total of three such initiatives, the latest one being the future hospital of Maryland. Apart from this, the company also unveiled plans in this month itself to construct an inpatient rehabilitation hospital containing 40 beds in Owasso, OK. This hospital forms part of the JV formed between Encompass Health and Ascension St. John.

Providing affordable and high-quality rehabilitative care has resulted in strong performance of the company’s inpatient rehabilitation segment for quite a long time. This, in turn, has been aiding the top-line growth of Encompass Health, which has been improving since 2010 and the fourth-quarter 2020 results were no exception to the trend. Case in point, favorable pricing actions undertaken in the inpatient rehabilitation segment, have led to a rise of 2.5% in fourth-quarter revenues.

The company has a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Some better-ranked stocks in the medical space include Tenet Healthcare Corporation (THC - Free Report) , Select Medical Holdings Corporation (SEM - Free Report) and Acorda Therapeutics, Inc. (ACOR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tenet Healthcare, Select Medical and Acorda Therapeutics have a trailing four-quarter earnings surprise of 199.09%, 221.78% and 16.24%, on average, respectively.

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