The Ensign Group, Inc. The ENSG continues to be in the good books of investors due to its inorganic growth strategy which has led to improved turnover. ENSG has established itself as a lucrative investment option thanks to a strong portfolio. All of these factors inspire investor confidence in the stock.
The ENSG has an impressive VGM score of B. Here, V represents the value, G the growth and M the dynamics, the score being a weighted combination of the three factors.
Over the past 60 days, the stock has seen its 2021 profit estimate move 0.3% north.
Ensign Group’s 12-month return on equity (ROE) strengthens its growth potential. Its ROE of 20.4% came against the industry’s negative ROE of 22.6%. This, in turn, reflects its tactical efficiency in using its shareholders’ funds.
Now let’s take a look at what makes this currently Zacks Rank # 3 (Hold) player an appealing stock. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
ENSG’s revenue has increased since 2012. Its healthy revenue stream is evident from its five-year (2015-2020) CAGR of 12.4%, driven by both its Medicaid and Medicare activities. In the first nine months of 2021, total revenue grew 9.1% year-over-year. The ENSG projects revenue for 2021 in the range of $ 2.62 billion to $ 2.69 billion, with the midpoint indicating a 16% increase from the figure released in 2020.
The nursing home player has been buying qualified nursing homes for some time. For example, last month the ENSG purchased the real estate properties of five qualified nursing and assisted living facilities. Ensign Group remains keen to conclude new transactions for the purchase of assets, the operations of which are entrusted either to a subsidiary of Ensign Group or to a third party.
With each acquisition, the ENSG refines its expertise, both clinically and financially. Ensign Group continues to actively seek transactions to acquire real estate and lease both high performing and struggling nursing, assisted living and other healthcare related businesses in new and existing markets. .
As of September 30, 2021, Ensign Group operated 242 facilities under long-term leases and had options to purchase 11 of the 175 facilities. The ENSG has planned a series of activities for the future.
The level of solvency is also impressive. Its total debt is 12.8% of its equity, well below the industry average of 77.7%. Additionally, its interest multiplied by earnings stands at 38.21X versus the negative industry average of 1.16X. As at September 30, 2021, it had $ 304.6 million in cash and cash equivalents and a revolving line of credit of up to $ 350 million as available capacity, greater than its long-term debt less current maturities of $ 140.6 million.
Ensign Group has been a dividend paying organization since 2002 and has increased its payouts every year for the past 18 years. The ENSG Board of Directors recently approved a 5% increase in its quarterly dividend in order to increase shareholder value. The payment of the ENSG dividend is expected to continue.
Along with the third quarter results, the ENSG raised its profit forecast for the current year to $ 3.60- $ 3.68, up from the previous forecast from $ 3.55 to $ 3.67 . He still expects his annual revenues to be between $ 2.62 billion and $ 2.69 billion, with the midpoint pointing to a 16% increase from the figure released in 2020. Bullish forecast should support optimism investors on the title.
The consensus mark for 2021 profits is up 15.9% from the figure released a year ago.
ENSG shares gained 9.7% in one year, underperforming their industrygrowth of 11.4%.
Image source: Zacks Investment Research
Actions to consider
Some better ranked stocks in the medical sector are Molina Health, Inc. Ministry of Health, AmerisourceBergen company ABC and AMN health services AMN.
With a Zacks Rank # 2 (Buy), Molina Healthcare is a multi-state managed care organization participating exclusively in government-sponsored healthcare programs, such as the Medicaid Program and the Children’s Health Insurance Program ( SCHIP), aimed at low-income people. people. Its profits have managed to beat the mark in two of its last four quarters (missing the mark in the other two) with the average beat being 4%.
AmerisourceBergen is one of the world’s largest pharmacy services companies, focused on drug distribution and related services to reduce healthcare costs and improve patient outcomes. With a Zacks ranking of 2 at the moment, ABC has managed to deliver a surprise of 5.48% on average over the last four quarters.
AMN Healthcare Services is a travel healthcare staffing company with a Zacks rank of 2 today. It has a surprise over the last four quarters of 19.51%, on average.
Shares of Molina Healthcare, AmerisourceBergen and AMN Healthcare Services have increased by 47.5%, 24.1% and 63.3% each in the past year.
5 actions in the process of doubling
Each has been handpicked by a Zacks expert as the # 1 favorite stock to earn + 100% or more in 2021. Previous recommendations have climbed + 143.0%, + 175.9%, +498 , 3% and + 673.0%.
Most of the stock in this report is flying under Wall Street’s radar, which provides a great opportunity to get into the ground floor.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.