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Community Health (CYH) Divests Hospital for $92 Million
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Community Health Systems, Inc. (CYH - Free Report) divested the West Virginia-based Plateau Medical Center to subsidiaries of Vandalia Health for a cash deal of approximately $92 million. Vandalia Health is strongly rooted in the state.
The agreement was signed in December 2022 and closed in the very beginning of this April. The medical facility, comprising 25 beds, together with its respective assets, physician clinic operations and outpatient services form part of the divestiture deal.
CYH has been quite active on the divestiture front for the past few years. The trend continues this year as well and denotes the sustenance of the sincere belief that it puts on divestitures.
In February 2023, the subsidiaries of Community Health inked a deal to divest two healthcare facilities of North Carolina and their respective assets to Novant Health. Subject to customary regulatory nod, the transaction is likely to close in later 2023 and fetch cash proceeds of roughly $320 million to CYH.
The beginning of 2023 marked Community Health’s announcement of selling Greenbrier Valley Medical Center. This healthcare facility of West Virginia was also divested to Vandalia Health.
Management tends to pursue such divestitures as the medical centers do not fall under any of CYH’s strategically beneficial service areas. Moreover, these centres fetch lower operating profits. Once the facilities are divested, the funds required for operating the non-core assets can be redirected for investments on business areas that fetch higher returns to the healthcare services provider.
Community Health has derived an added utility from the proceeds received from such continuous divestitures. Management puts such proceeds to use in addressing general corporate purposes, which can be either debt repayments or debt repurchases and for pursuing capital expenditure.
Notably, the divestitures seem to have benefited Community Health as its long-term debt reduced to $11,614 million at the end of 2022 from the 2021-end figure of $12,109 million. A reducing debt burden has also brought down interest expenses for the healthcare services provider in 2022.
With debt repayments met through divestitures, CYH can put its cash reserves and operating cash flows to use for actively pursuing growth-related initiatives. It takes the help of acquisitions and partnerships to grow medical service offerings, boost business scale and expand nationwide presence.
Shares of Community Health have gained 11.5% year to date compared with the industry’s growth of 6%. CYH currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the Medical space are Bio-Rad Laboratories, Inc. (BIO - Free Report) , Horizon Therapeutics plc and Avanos Medical, Inc. (AVNS - Free Report) . While Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy), Horizon Therapeutics and Avanos Medical carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bio-Rad Laboratories’ earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average beat being 27.54%. The Zacks Consensus Estimate for BIO’s 2023 earnings and revenues suggests an improvement of 10.3% and 5.2% from the respective year-ago reported figures.
The consensus estimate for Bio-Rad Laboratories’ 2023 earnings has moved 5.9% north in the past 60 days. Shares of BIO have gained 10.5% year to date.
Horizon Therapeutics’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average being 7.95%. The Zacks Consensus Estimate for HZNP’s 2023 earnings and revenues suggests improvements of 9.3% and 9.8% from the respective year-ago reported figures.
The consensus estimate for Horizon Therapeutics’ 2023 earnings has moved 2.3% north in the past 60 days. Shares of HZNP have declined 4.3% year to date.
Avanos Medical’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.01%. The Zacks Consensus Estimate for AVNS’s 2023 earnings suggests an improvement of 1.8% from the year-ago reported figure.
Avanos Medical boasts an impressive Value Score of A. Shares of AVNS have gained 9.5% year to date.
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Community Health (CYH) Divests Hospital for $92 Million
Community Health Systems, Inc. (CYH - Free Report) divested the West Virginia-based Plateau Medical Center to subsidiaries of Vandalia Health for a cash deal of approximately $92 million. Vandalia Health is strongly rooted in the state.
The agreement was signed in December 2022 and closed in the very beginning of this April. The medical facility, comprising 25 beds, together with its respective assets, physician clinic operations and outpatient services form part of the divestiture deal.
CYH has been quite active on the divestiture front for the past few years. The trend continues this year as well and denotes the sustenance of the sincere belief that it puts on divestitures.
In February 2023, the subsidiaries of Community Health inked a deal to divest two healthcare facilities of North Carolina and their respective assets to Novant Health. Subject to customary regulatory nod, the transaction is likely to close in later 2023 and fetch cash proceeds of roughly $320 million to CYH.
The beginning of 2023 marked Community Health’s announcement of selling Greenbrier Valley Medical Center. This healthcare facility of West Virginia was also divested to Vandalia Health.
Management tends to pursue such divestitures as the medical centers do not fall under any of CYH’s strategically beneficial service areas. Moreover, these centres fetch lower operating profits. Once the facilities are divested, the funds required for operating the non-core assets can be redirected for investments on business areas that fetch higher returns to the healthcare services provider.
Community Health has derived an added utility from the proceeds received from such continuous divestitures. Management puts such proceeds to use in addressing general corporate purposes, which can be either debt repayments or debt repurchases and for pursuing capital expenditure.
Notably, the divestitures seem to have benefited Community Health as its long-term debt reduced to $11,614 million at the end of 2022 from the 2021-end figure of $12,109 million. A reducing debt burden has also brought down interest expenses for the healthcare services provider in 2022.
With debt repayments met through divestitures, CYH can put its cash reserves and operating cash flows to use for actively pursuing growth-related initiatives. It takes the help of acquisitions and partnerships to grow medical service offerings, boost business scale and expand nationwide presence.
Shares of Community Health have gained 11.5% year to date compared with the industry’s growth of 6%. CYH currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the Medical space are Bio-Rad Laboratories, Inc. (BIO - Free Report) , Horizon Therapeutics plc and Avanos Medical, Inc. (AVNS - Free Report) . While Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy), Horizon Therapeutics and Avanos Medical carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bio-Rad Laboratories’ earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average beat being 27.54%. The Zacks Consensus Estimate for BIO’s 2023 earnings and revenues suggests an improvement of 10.3% and 5.2% from the respective year-ago reported figures.
The consensus estimate for Bio-Rad Laboratories’ 2023 earnings has moved 5.9% north in the past 60 days. Shares of BIO have gained 10.5% year to date.
Horizon Therapeutics’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average being 7.95%. The Zacks Consensus Estimate for HZNP’s 2023 earnings and revenues suggests improvements of 9.3% and 9.8% from the respective year-ago reported figures.
The consensus estimate for Horizon Therapeutics’ 2023 earnings has moved 2.3% north in the past 60 days. Shares of HZNP have declined 4.3% year to date.
Avanos Medical’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.01%. The Zacks Consensus Estimate for AVNS’s 2023 earnings suggests an improvement of 1.8% from the year-ago reported figure.
Avanos Medical boasts an impressive Value Score of A. Shares of AVNS have gained 9.5% year to date.