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Ensign Group (ENSG) on Buyout Spree, Expands in California

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The Ensign Group, Inc. ENSG recently bought three skilled nursing facilities and their operations. The transaction, which is subject to a long-term, triple net lease, has been effective since Jan 1, 2021.

The three health hubs named Golden Hill Post Acute, St. Catherine Healthcare and Camino Healthcare are located in Southern California. Each of them contains 99 skilled nursing beds.

Holding strong organic growth potential, operations of the three acquired health hubs will be integrated within the company’s respective regional operations. These facilities will also be working closely with the company’s local healthcare partners to deliver improved health services across the respective regions. In fact, these buyouts not only seem to be well-timed amid the pandemic induced health woes but also are in sync with the company’s endeavor to provide enhanced health outcomes.

With the addition of these three skilled nursing facilities, the portfolio of Ensign Group now comprises 231 healthcare operations spanning across 13 U.S. States. While assisted living operations totaling 24 also form part of its portfolio of total healthcare operations, the healthcare provider owns the real estate at 95 healthcare operations.

Needless to say, Ensign Group has been on an acquisition spree, evident from its track record of closing buyouts of 208 facilities over the 2009-2019 period. Prior to the latest move, Hays Nursing and Rehabilitation Center located in San Marcos, TX was the last skilled nursing facility added to the company’s portfolio. It was acquired in December 2020.

Each buyout has been reinforcing the company’s proven expertise in acquiring real estate or leasing out post-acute care operations and evolving them into market leaders. These acquisitions have also helped Ensign Group to reach out to several U.S. states, thereby bolstering national footprint. The latest move is a testament to the company’s efforts to strengthen its foothold in the state of California further. Prior to the latest purchase in California, the company had acquired an assisted living community named Mainplace Senior Living located in the state in 2019.

All these initiatives have been helping the company to bolster its healthcare portfolio. Management at Ensign Group is eager to utilize opportunities for purchasing real estate and lease skilled nursing, assisted living and other healthcare-related businesses that have been performing well. This highlights its intentions of sustaining this momentum. It also strives to provide the necessary assistance to struggling healthcare businesses across the United States.

Shares of Ensign Group have surged 64.7% in a year compared with the industry’s rally of 14.6%.


 

Ensign Group presently carries a Zacks Rank #4 (Sell).          

Stocks to Consider

Some better-ranked stocks in the medical space are Tenet Healthcare Corporation THC, Hologic, Inc. HOLX and Acadia Healthcare Company, Inc. ACHC. While Tenet Healthcare and Hologic sport a Zacks Rank #1 (Strong Buy), Acadia Healthcare carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tenet Healthcare, Hologic and Acadia Healthcare have a trailing four-quarter earnings surprise of 188.14%, 45.89% and 20.84%, on average, respectively.

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Hologic, Inc. (HOLX) : Free Stock Analysis Report
 
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