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Ensign Group (ENSG) Acquires to Expand in Texas & Idaho

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The Ensign Group, Inc. (ENSG - Free Report) recently announced the completion of buyouts of the operations of River Pointe of Trinity Healthcare and Rehabilitation Center in Trinity, TX, Park Village Healthcare and Rehabilitation in Soto, TX and Skyline Transitional Care Center in Boise, ID. Subject to a long-term, triple net lease, the acquisitions were effective Oct 1, 2021.

The company is known for its buyout spree and this was an excellent opportunity for a deeper penetration in the Texas and Idaho markets. The local communities are expected to get enriched healthcare from this strategic move.

In August, the healthcare company bought Sedona Trace Health and Wellness Center in Austin, TX and Cedar Pointe Health and Wellness Center in Cedar, TX.

It is worth mentioning that the Ensign Group has always been inclined toward acquiring distressed healthcare operations that require a massive clinical, financial and cultural turnaround. Management reiterated that the company is not only keen on exploring opportunities to purchase real estate and lease skilled nursing, assisted living and other healthcare-related businesses performing well but it also intends to provide necessary assistance to struggling healthcare businesses across the United States.

Closure of the deal brings Ensign Group’s portfolio to 245 healthcare operations, 22 of which include senior-living operations. The company owns 95 real-estate assets.

Acquisition Story

The company boasts a strong inorganic growth story with several acquisitions made in the past decade. Its historical growth is mainly driven by its expertise in taking over real estate or leasing post-acute care operations and transforming the same into market leaders. With each purchase, the company honed its capability, both clinically and financially.

This highlights this Zacks Rank #3 (Hold) company’s intention to sustain the momentum.

Price Performance

Shares of the company have gained 31.9% in a year’s time, underperforming its industry’s growth of 46.2%. We expect the stock to continue performing well owing to growing revenues, an impressive inorganic growth profile and balance-sheet strength.

Zacks Investment ResearchImage Source: Zacks Investment Research


Other stocks in the same space, such as HCA Healthcare, Inc. (HCA - Free Report) , Acadia Healthcare Company, Inc. (ACHC - Free Report) and Universal Health Services, Inc. (UHS - Free Report) have also rallied 90.4%, 105.8% and 22.8%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.