Back to top

Image: Bigstock

LHC Group (LHCG) Boosts Home Health, Hospice Arms With Buyouts

Read MoreHide Full Article

LHC Group, Inc. recently inked deals to acquire three home health, hospice and palliative care providers across three states. Further, it completed previously announced buyouts, having locations in the states of Idaho, Oregon, Arizona and Texas. Notably, all of the three purchase agreements are anticipated to conclude on Aug 1 upon completion of necessary closing conditions.

The announcement of these acquisitions and completion of prior ones is likely to provide a substantial boost to the company’s hospice and home health business lines.

Significance of the Buyouts

With respect to the first of the three buyouts, LHC Group will buy Cavalier Healthcare Services — a home health agency — in Virginia. The buyout will provide new service area, thereby giving better support to LHC Group’s operations with a wider service area in the Washington D.C. and Maryland markets. This, in turn, will allow LHC Group to offer continuity of care to patients throughout contiguous counties.

Zacks Investment ResearchImage Source: Zacks Investment Research

Coming to the second one, the company will be able to expand its services in the Evansville market with the MSA Hospice buyout in Indiana. The acquisition will support LHC Group’s co-location growth strategy to offer multiple in-home healthcare services in certain markets. Notably, MSA Hospice will rebrand as OMNI Hospice in line with LHC Group’s home health provider of the similar name.

For the third one, LHC Group will buy Ashley County Medical Center Home Health in Crossett, AR. The transaction will help the acquirer to strengthen its home health presence in the state.
Notably, LHC Group projects annualized revenues of around $8 million from the aforementioned buyouts, while also noting that it will not materially impact its 2021 earnings per share.

Market Prospects

Per a report by Grand View Research, the global home healthcare market was worth $281.8 billion in 2019 and is anticipated to see a CAGR of 7.9% between 2020 and 2027. Aging population across the world and growing patient preference for value-based healthcare are likely to drive market growth. Hence, these acquisitions come at an opportune time for the company.

Finalization of Previous Buyouts

LHC Group completed the buyouts of Heart ‘n Home Hospice in Idaho and Oregon, Casa de la Luz in Arizona, Regent Home Health as well as Community Care Health — both in Texas.

Price Performance

Shares of the Zacks Rank #3 (Hold) company have gained 14% in a year’s time, compared with the industry’s growth of 6%.

Key Picks

Some better-ranked stocks from the broader medical space are Veeva Systems Inc. (VEEV - Free Report) , DaVita Inc. (DVA - Free Report) and Baxter International Inc. (BAX - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Veeva Systems’ long-term earnings growth rate is estimated at 15.8%.

DaVita’s long-term earnings growth rate is estimated at 14.4%.

Baxter International’s long-term earnings growth rate is projected at 9.3%.

Time to Invest in Legal Marijuana

If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%

You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Baxter International Inc. (BAX) - $25 value - yours FREE >>

DaVita Inc. (DVA) - $25 value - yours FREE >>

Veeva Systems Inc. (VEEV) - $25 value - yours FREE >>

Published in