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Encompass Health (EHC) Opens Hospital, Boosts Texas Presence

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Zacks Equity Research
·4 min read
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Encompass Health Corporation EHC recently opened an inpatient rehabilitation hospital named Shannon Rehabilitation Hospital in San Angelo, TX. Equipped with 40 beds, the hospital has been formed as a result of a joint venture between Encompass Health and Shannon Health announced in January 2020.

Through offering enhanced rehabilitation technologies across the Concho Valley region, the specialized hospital will take care of regional health issues more effectively with an amalgamation of best technology and practices.

Moreover, the Shannon Rehabilitation Hospital provides physical, occupational and speech therapies, as a result of which patients grappling with debilitating illnesses and injuries are poised well for faster recovery. In addition to private patient rooms, the new hospital is equipped with enhanced rehabilitation technologies. With nursing care being available for 24 hours, the establishment consists of specialized nurses, therapists and physicians.

The latest move reinforces Encompass Health’s presence across the Concho Valley region and broadly across the state of Texas. Shannon Health seems to be the perfect fit for fulfilling the company’s endeavor as the former is the largest locally-based healthcare provider in the Concho Valley and neighbouring region. Also, the same has been catering to diverse healthcare needs of the people in West Texas for more than 80 years.

With the new hospital, Encompass Health’s inpatient rehabilitation hospital count rose to 138. Further, it has a nationwide portfolio of 241 home health hubs and 82 hospice centers across 39 states and Puerto Rico.

Shares of Encompass Health have gained 24.5% in the past six months compared with the industry’s 8.8% growth.

Strong Texas Footprint

Encompass Health boasts a well-established presence in Texas. This month itself, it announced plans to build an inpatient rehabilitation hospital equipped with 40 beds in Prosper, part of Texas, for catering to the health issues of residents in the Dallas-Fort Worth region. Also, the healthcare provider has one hospital under construction in Waco, whose establishment plan was laid down last year. Also, higher demand for inpatient rehabilitation services across the state and an aging U.S. population underline the company’s rampant expansion plans.

Encompass Health has left no stone unturned to offer cost-effective healthcare services by delving deeper across several U.S. regions. For serving this purpose, it kept on adding inpatient rehabilitation hospitals to its network. These initiatives have not only broadened the company’s U.S. footprint but also provided an added impetus to the Inpatient Rehabilitation segment performance. Usually accounting for a major portion of the company’s top-line growth, the segment sustained the trend last year as well. Revenues from the segment inched up 0.9% in 2020 driven by favorable pricing actions undertaken in the inpatient rehabilitation segment.

Encompass Health currently has a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks in the medical space include Penumbra, Inc. PEN, Repligen Corporation RGEN and Hologic, Inc. HOLX. While Penumbra sports a Zacks Rank #1 (Strong Buy), Repligen and Hologic carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penumbra, Repligen and Hologic delivered trailing four-quarter earnings surprise of 177.2%, 51.5% and 54.3%, on average, respectively.

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