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Ensign Hikes Dividend for the 23rd Straight Year: Is it Sustainable?

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Key Takeaways

  • ENSG raised its quarterly dividend to 6.5 cents, marking 23 consecutive years of dividend increases.
  • Ensign paid $10.8M in dividends in the first nine months of 2025 and repurchased $20M in stock.
  • ENSG ended Q3 with $443.7M in cash and a low 6.1% long-term debt-to-capital ratio.

The Ensign Group, Inc. (ENSG - Free Report) recently raised its quarterly dividend to 6.5 cents per share, up from 6.25 cents, extending its record of dividend growth. Over the past five years, the insurer has raised its payout six times, achieving an annualized dividend growth rate of 4.3%. The latest 4% increase brings Ensign’s dividend yield to 0.15%, based on the Dec. 22 closing price of $179.03, above the industry average of 0.11%. The increased amount will be paid out by Jan. 31, 2026, to its shareholders on record as of Dec. 31, 2025. 

With this move, Ensign achieved 23 consecutive years of dividend hikes, underscoring its commitment to returning value to shareholders. In the first nine months of 2025, it paid dividends worth $10.8 million. It repurchased $20 million in stock during the first half of 2025 but didn't make any repurchases in the third quarter.

These shareholder-focused actions are supported by Ensign’s earnings base and solid balance sheet. The Zacks Consensus Estimate projects 2025 earnings to jump 18.2% year over year to $6.50 per share. Earnings for 2026 are expected to increase by 9% to $7.09 per share.

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The nursing care service provider ended the third quarter with $443.7 million in cash and cash equivalents and had a long-term debt, less current maturities, of only $138.6 million. Its long-term debt-to-capital ratio of 6.1% is significantly lower than the industry average of 83.9%. While free cash flow dipped over the trailing 12-month period to a negative zone, rising occupancy rates, higher patient days and higher skilled service revenues should keep momentum strong.

Peers’ Shareholder-Friendly Efforts

Companies like Universal Health Services, Inc. (UHS - Free Report) and Tenet Healthcare Corporation (THC - Free Report) are also actively returning capital to shareholders.

Since 2019, Universal Health has repurchased nearly 30% of shares outstanding. The authorization was increased by $1.5 billion in October 2025, leaving $1.8 billion remaining. UHS has been paying a consistent dividend of 20 cents per share since 2019. Meanwhile, Tenet Healthcare doesn’t pay a dividend; it focuses on share buybacks and other capital allocation actions. It bought back almost $1.2 billion worth of shares in the first three quarters of 2025. THC had around $1.7 billion left in its fund, as of Sept. 30, 2025, for future buybacks.

Ensign’s Price Performance and Valuation

Shares of ENSG have gained 33.8% in the past year compared with the industry’s growth of 31.9%.

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From a valuation standpoint, Ensign trades at a forward price-to-earnings ratio of 27.89, down from the industry average of 50.23. Yet ENSG has a Value Score of C at present.

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The stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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