The Ensign Group, Inc. ENSG acquires four skilled nursing facilities and their operations in Washington, effective from Jun 1, 2021. Each operation is subject to a long-term, triple-net master lease inked with Ensign Group affiliates and CareTrust REIT, Inc. CTRE.
Notably, CareTrust owns the real estate of the acquired operations. The former had a successful spin-off from Ensign Group in 2014. Consequently, it emerged to be a self-operated real estate investment trust entrusted with the responsibility of healthcare-linked properties.
Coming back, the four acquired health hubs, namely Mira Vista Care Center, Shoreline Health and Rehabilitation, The Oaks at Lakewood and The Oaks at Timberline, contain 94, 114, 80 and 98 beds, respectively.
Operations of the health hubs will be integrated with Ensign Group’s growing healthcare portfolio. The latest move is part of the company’s efforts to expand in the state of Washington, where the healthcare space was not being catered to by Ensign Group for quite some time. The company has a team of well-versed clinical and operational leaders in the state. This is expected to offer enhanced health services across Washington.
With the latest acquisition, Ensign Group’s portfolio is now comprised of 240 healthcare operations spanning 13 U.S. States. Among the total, senior living operations summed up at 22. Beside these, the healthcare provider owns real estate at 95 healthcare operations.
The recent move highlights the strong bond shared between Ensign Group and CareTrust. CareTrust’s term expansion of the recent lease by 10 years on the first-to-expire master lease pool provides further evidence of the same.
Notably, Ensign Group has undertaken a plethora of acquisitions in the past decade. Each buyout has been bolstering the company’s proven expertise in acquiring real estate or leasing out post-acute care operations.
In fact, management of Ensign Group is eager to utilize opportunities for purchasing real estate and leasing well-performing skilled nursing, assisted living and other healthcare-related businesses. Time and again, it has extended a helping hand toward struggling healthcare businesses across the United States. Consequently, the company aims to transform both well-performing and suffering businesses into market leaders.
The acquisitions have helped Ensign Group to reach out to several U.S. states, thereby, bolstering its national footprint. Some of the states in which the company has frequently penetrated to offer healthcare services are Texas, Arizona and Colorado.
Moreover, a series of buyouts have been driving the company’s revenues, which witnessed a three-year CAGR of 14.6%. For 2021, it expects revenues of $2.62-$2.69 billion, the mid-point of which suggests 10.6% growth from the 2020 reported figure. Also, the same is in line with the Zacks Consensus Estimate of $2.65 billion.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) healthcare provider have surged 86.7% in a year compared with the industry’s rally of 80.2%.
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Stocks to Consider
Some better-ranked stocks in the medical space are Tenet Healthcare Corporation THC and HCA Healthcare, Inc. HCA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tenet Healthcare and HCA Healthcare have a trailing four-quarter earnings surprise of 106.38% and 67.08%, on average, respectively.
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