Ensign Adds 8 Facilities in Kansas & Colorado to Expand Footprint

The Ensign Group, Inc. ENSG announced that it has bought the operations of a nursing facility in Overland Park, KS. It has also acquired the operations of seven nursing facilities in Colorado. All these buyouts (with long-term, triple net leases) had an effective date of Sept. 1, 2024. 

The 102-bed unit in Kansas, named Prairie Ridge Health and Rehabilitation, boosts ENSG's footprint in the state. The acquisition comes at an opportune time, as the company is experiencing significant growth in the state over the last year.

The series of acquisitions in Colorado includes the 106-bed Desert Willow Health and Rehabilitation Center in Pueblo, 133-bed Junction Creek Health and Rehabilitation Center in Durango, 104-bed Pelican Pointe Health and Rehabilitation Center in Windsor, 100-bed Riverbend Health and Rehabilitation Center in Loveland, 100-bed Broadview Health and Rehabilitation Center in Greeley, 107-bed Westlake Lodge Health and Rehabilitation Center in Greeley and 110-bed Linden Place Health and Rehabilitation Center in Longmont.

The acquisition deals have increased Ensign's portfolio to encompass 323 healthcare operations spanning 14 states. Of the total, 29 also have senior living operations. The company, along with its subsidiaries like Standard Bearer, now owns 122 real estate properties.

ENSG boasts a strong inorganic growth story. The company remains committed to pursuing opportunities for acquiring real estate and leasing both successful and struggling skilled nursing, senior living and other healthcare-related operations. As the number of facilities rises, revenues from skilled services are expected to increase, supported by higher occupancy rates and patient days, indicating robust growth in profits and the top line. This is reflected in the estimates.

ENSG's 2024 Estimates

The Zacks Consensus Estimate for Ensign's 2024 earnings indicates 14.1% year-over-year growth to $5.44 per share. It beat earnings estimates in each of the past four quarters, with an average surprise of 1.4%. Also, the consensus mark for 2024 revenues indicates a 13.1% jump from a year ago.

Price Performance

Shares of Ensign have jumped 23% in the past three months compared with the industry's 20.9% growth.

Zacks Rank & Other Key Picks

Image Source: Zacks Investment Research

The company currently carries a Zacks Rank #2 (Buy). Investors can look at some other top-ranked stocks in the broader Medical space, like Universal Health Services, Inc. UHS, Tenet Healthcare Corporation THC and Quest Diagnostics Incorporated DGX. While Universal Health and Tenet Healthcare currently sport a Zacks Rank #1 (Strong Buy) each, Quest Diagnostics carries a Zacks Rank #2.

The Zacks Consensus Estimate for Universal Health Services' 2024 bottom line suggests 50.8% year-over-year growth. UHS witnessed two upward estimate revisions over the past month against no movement in the opposite direction. It beat earnings estimates in each of the last four quarters, with the average surprise being 14.6%.

The Zacks Consensus Estimate for Tenet Healthcare's 2024 bottom line is pegged at $10.70 per share, which indicates 53.3% growth from a year ago. During the past month, THC witnessed two upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the last four quarters, with the average surprise being 58.5%.

The Zacks Consensus Estimate for Quest Diagnostics' 2024 full-year earnings implies a 2.1% increase from the year-ago reported figure. DGX beat earnings estimates in each of the last four quarters, with an average surprise of 3.3%. The consensus mark for its current-year revenues is pegged at $9.6 billion, which indicates a 3.3% year-over-year increase.

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