Back to top

Image: Bigstock

Strategic Acquisitions Aid Revenue Growth at Ensign Group

Read MoreHide Full Article

The Ensign Group, Inc. (ENSG - Free Report) boasts a strong inorganic growth story with several acquisitions made in the past decade. Its historical growth has been mainly driven by its expertise in acquiring real estate or leasing post-acute care operations and transforming the same into market leaders.

Recently, The Ensign Group made a series of buyouts, such as the real estate and operations of Temple View Transitional Care Center in Rexburg, ID; the real estate and operations of Surprise Health and Rehabilitation Center in Surprise, AZ; the operations of Mainplace Senior Living, a 91-unit assisted living community in Orange, CA; the assets of Agape Hospice and Palliative Care and the real estate and operations of The Terrace at Mt. Ogden in UT.

All these buyouts are expected to boost the company’s capabilities and add to its revenue growth. With the most recent purchase, Ensign Group now has a portfolio of 202 skilled nursing hubs, of which 27 consist of assisted living operations, 57 assisted and independent living operations, 26 home health agencies, 28 hospice agencies and nine home care businesses across 16 states. The company owns the real estate at 80 of its 259 healthcare facilities.

The Ensign Group’s acquisition strategy comprises application of its core operating expertise to improve the above operations both clinically and financially. It continues to seek transactions to acquire real estate properties and lease both well-performing and struggling skilled nursing, assisted living and other healthcare related businesses in the new and the existing markets.

Moreover, the company’s recent announcement of the separation of its home health and hospice business plus all its senior living operations from the parent company into a publicly traded entity will not slow down its acquisitions at all.

Ensign Group's growth plans and integrations have driven its top line, which has been growing since 2012. This uptick is evident from its 2012-2018 CAGR of 16.3%. We expect these growth policies and acquisitions to further bolster the revenue stream. The company also anticipates annual revenues between $2.34 billion and $2.40 billion, the mid-point indicating a rise of 16.2% from the 2018 figure.

Shares of this Zacks Rank #2 (Buy) company have surged 31.9% in a year's time, outperforming the industry's rise of 3.9%.

Other Stocks to Consider

Investors interested in the medical sector can also take a look at some other top-ranked stocks like Molina Healthcare, Inc (MOH - Free Report) , Centene Corporation (CNC - Free Report) and Humana Inc. (HUM - Free Report) , each carrying the same solid Zacks Rank as Ensign Group. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Molina offers Medicaid-related solutions to meet the health care needs of low-income families and individuals. In the trailing four quarters, the company came up with average beat of 66.9%.

Centene works as a diversified and multi-national healthcare enterprise in the United States.In the preceding four quarters, the company delivered average beat of 4.6%.

Humana works as a health and well-being company in the United States. The company pulled off average positive surprise of 7.79% in the last four quarters.

5 Stocks Set to Double

Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.

Today, see all 5 stocks with extreme growth potential >>