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LHC Group's (LHCG) Deal With Optum to Boost Value-Based Care
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LHC Group, Inc. and Optum, a diversified health services company and part of UnitedHealth Group (UNH - Free Report) , recently inked a deal to jointly improve their shared capability to accelerate value-based care, primarily in the comfort of a patient’s own residence. Per the agreement, UnitedHealth Group will acquire LHC Group by paying $170 for each share of the latter in cash.
The buyout is likely to be completed in the second half of 2022 upon the satisfaction of the required shareholder (LHC Group) and regulatory approvals, as well as other customary closing conditions.
The transaction is anticipated to remain neutral to UnitedHealth Group’s outlook for adjusted net earnings per share in 2022 and be modestly accretive in 2023 while advancing strongly in the following years.
Significance of the Buyout
This transaction brings together two companies that are committed to providing compassionate and comprehensive care to patients and their families. LHC Group has a track record of superior quality home and community-based care, which, when combined with Optum’s significant value-based care expertise and resources, will lead to the advancement of the combined companies’ capability to provide integrated care. This, in turn, is likely to enhance patient outcomes and experiences.
Image Source: Zacks Investment Research
Per management at LHC Group, the company continues to focus on helping people, which is its core mission. The collaboration with the Optum team and its value-based capabilities will aid LHC Group to expand its patient-centric mission to help improve best care practices throughout the country.
Per Optum’s management, LHC Group’s excellent care coordination capabilities and human touch are likely to bolster the reach of Optum’s value-based capabilities and the full continuum of care, which includes primary care, home and community care, virtual care, behavioral health and ambulatory surgery.
Market Prospects
Per a report by Grand View Research, the global home healthcare market was worth $299 billion in 2020 and is anticipated to witness a CAGR of 7.9% from 2021 to 2028. The rising geriatric population and growing incidence of target diseases and orthopedic diseases are factors that are likely to drive this market’s growth.
Another Notable Development
This month, the company inked a deal with Archbold Medical Center to form a new joint venture to boost home health services in Thomasville, GA and across the greater region. This joint venture will include two locations catering to Thomas, Brooks, Grady, Colquitt, Mitchell, Decatur, and Seminole counties, thereby expanding the LHC Group service area to five additional counties.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 21.4% on a year-to-date basis, against the industry’s decline of 19.7%.
Stocks to Consider
Some better-ranked stocks from the broader medical space are IDEXX Laboratories, Inc. (IDXX - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
IDEXX Laboratories’ long-term earnings growth rate is estimated at 13%. IDXX’s earnings yield of 1.7% compares favorably with the industry’s (4.8%).
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #2.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.
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LHC Group's (LHCG) Deal With Optum to Boost Value-Based Care
LHC Group, Inc. and Optum, a diversified health services company and part of UnitedHealth Group (UNH - Free Report) , recently inked a deal to jointly improve their shared capability to accelerate value-based care, primarily in the comfort of a patient’s own residence. Per the agreement, UnitedHealth Group will acquire LHC Group by paying $170 for each share of the latter in cash.
The buyout is likely to be completed in the second half of 2022 upon the satisfaction of the required shareholder (LHC Group) and regulatory approvals, as well as other customary closing conditions.
The transaction is anticipated to remain neutral to UnitedHealth Group’s outlook for adjusted net earnings per share in 2022 and be modestly accretive in 2023 while advancing strongly in the following years.
Significance of the Buyout
This transaction brings together two companies that are committed to providing compassionate and comprehensive care to patients and their families. LHC Group has a track record of superior quality home and community-based care, which, when combined with Optum’s significant value-based care expertise and resources, will lead to the advancement of the combined companies’ capability to provide integrated care. This, in turn, is likely to enhance patient outcomes and experiences.
Image Source: Zacks Investment Research
Per management at LHC Group, the company continues to focus on helping people, which is its core mission. The collaboration with the Optum team and its value-based capabilities will aid LHC Group to expand its patient-centric mission to help improve best care practices throughout the country.
Per Optum’s management, LHC Group’s excellent care coordination capabilities and human touch are likely to bolster the reach of Optum’s value-based capabilities and the full continuum of care, which includes primary care, home and community care, virtual care, behavioral health and ambulatory surgery.
Market Prospects
Per a report by Grand View Research, the global home healthcare market was worth $299 billion in 2020 and is anticipated to witness a CAGR of 7.9% from 2021 to 2028. The rising geriatric population and growing incidence of target diseases and orthopedic diseases are factors that are likely to drive this market’s growth.
Another Notable Development
This month, the company inked a deal with Archbold Medical Center to form a new joint venture to boost home health services in Thomasville, GA and across the greater region. This joint venture will include two locations catering to Thomas, Brooks, Grady, Colquitt, Mitchell, Decatur, and Seminole counties, thereby expanding the LHC Group service area to five additional counties.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 21.4% on a year-to-date basis, against the industry’s decline of 19.7%.
Stocks to Consider
Some better-ranked stocks from the broader medical space are IDEXX Laboratories, Inc. (IDXX - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
IDEXX Laboratories surpassed earnings estimates in each of the trailing four quarters, the average surprise being 18.6%. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IDEXX Laboratories’ long-term earnings growth rate is estimated at 13%. IDXX’s earnings yield of 1.7% compares favorably with the industry’s (4.8%).
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #2.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.