Shares of
The Ensign Group, Inc.
ENSG
have gained 29.5% in the past six months compared with the
industry
’s 18.4% growth. The
Medical
sector has lost 3.2%, while the S&P 500 composite inched up 1.1% in the same time frame. With a market capitalization of $5.2 billion, the average volume of shares traded in the last three months was 0.3 million.
Image Source: Zacks Investment Research
Strong-skilled nursing services’ revenues, numerous facility buyouts and a bright 2022 outlook, coupled with a strong financial position, continue to drive Ensign Group.
The leading U.S. skilled nursing, senior living and rehabilitative services provider, with a Zacks Rank #3 (Hold), has a decent record of beating estimates in two of the trailing four quarters, meeting the mark once and missing the same on the other occasion, the average beat being 0.81%.
Can ENSG Retain Its Momentum?
The Zacks Consensus Estimate for Ensign Group’s 2022 earnings is pegged at $4.14 per share, indicating a 13.7% rise from that reported in the prior year. The consensus mark for revenues is pegged at $3 billion, suggesting 14.8% year-over-year growth. Management anticipates earnings per share between $4.10 and $4.18.
The Zacks Consensus Estimate for 2023 earnings is pegged at $4.63 per share, suggesting year-over-year growth of 11.9%. The consensus mark for revenues is pegged at $3.4 billion, indicating 11.5% year-over-year growth.
The top line of Ensign Group continues to gain on the back of growing skilled nursing services’ revenues, which usually account for a major chunk. For 2022, ENSG forecasts revenues of $3.01-$3.03 billion, the mid-point of which indicates a 16.2% improvement from the 2021 reported figure.
Ensign Group’s service revenues are derived from extending healthcare services to members under Medicaid, Medicare, private pay and managed care programs. Promising growth prospects in the Medicaid and Medicare markets are likely to sustain the solid demand for skilled nursing services at ENSG’s facilities.
Ensign Group follows an aggressive inorganic growth strategy and pursued multiple facility buyouts in almost every month of the year. Through such buyouts, ENSG works closely with a credible team of caregivers at each of the facilities and subsequently gains in-depth knowledge about the local communities to serve them better.
These growth-linked initiatives have strengthened the healthcare suite and nationwide presence of Ensign Group. ENSG presently operates 271 skilled nursing and senior living facilities. It also owns 108 real estate assets. Despite boasting a solid healthcare portfolio, Ensign Group seems to be in no mood to slow its expansion and continuously seeks opportunistic real-estate buyouts.
ENSG can continue pursing growth-related business investments in the days ahead. This has been made possible through the solid financial position of the healthcare provider. A growing cash balance, coupled with solid cash-generating abilities, substantiates the strong financial stand of Ensign Group.
Frequent share repurchases and dividend payments at regular intervals have empowered ENSG to boost investors’ confidence in the stock. The latest dividend hike was approved by management in December 2022.
Stocks to Consider
Some better-ranked stocks in the Medical space are
Assertio Holdings, Inc.
ASRT
,
ShockWave Medical, Inc.
SWAV
and
Elevance Health Inc.
ELV
, 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
.
Assertio’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average beat being 54.96%. The Zacks Consensus Estimate for ASRT’s 2022 earnings is pegged at 56 cents per share. A loss of 3 cents per share was reported in the prior year.
The consensus mark for ASRT’s 2022 earnings has moved 7.7% north in the past 30 days. Shares of Assertio have gained 42.9% in the past six months.
ShockWave Medical’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 146.10%. The Zacks Consensus Estimate for SWAV’s 2022 earnings is pegged at $2.93 per share. A loss of 26 cents per share was reported in the prior year.
The consensus mark for SWAV’s 2022 earnings has moved 1.7% north in the past 60 days. Shares of ShockWave Medical have gained 8.7% in the past six months.
Elevance Health’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 4.11%. The Zacks Consensus Estimate for ELV’s 2022 earnings indicates a rise of 11.7%, while the same for revenues suggests an improvement of 13.9% from the corresponding year-ago reported figures.
The Zacks Consesus Estimate for ELV’s 2022 earnings has moved 0.2% north in the past 60 days. Shares of Elevance Health have gained 8.3% in the past six months.
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