Home Health, Post-Acute Stocks Follow S&P, Begin Autumn with a Fall

After two consecutive months of forward progress, home health and post-acute care stock values took a bit of a tumble in September according to the Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices.

The HHI was off just 0.3% in September compared to August – a fraction of the S&P’s drop of more than 3.5% for the same time period. Meanwhile, the PAI surpassed the S&P’s negative performance by more than two points, falling nearly 6% for the month.

“As the pandemic continues, there’s still a lot of uncertainty across both the home health and larger post-acute care landscapes,” said Stoneridge Partners President and CEO Rich Tinsley. “Still, I’m heartened by the fact that the month-to-month volatility we were seeing earlier in the year has slowed. And we’re continuing to see sustained M&A activity at Stoneridge, so that’s definitely a good sign.”

Home Health Index

The Stoneridge HHI, updated monthly, follows the stock values of Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (Nasdaq: LHCG).

Both companies saw gains in August, but September told a different story. Baton Rouge, Louisiana-based Amedisys saw its stock value drop by almost 2.3% compared to August, while Lafayette, Louisiana-based LHC Group continued its steady climb, improving by nearly 2% on a month-over-month basis.

“Stockholders in the home health space have to be pleased overall with how these companies have performed during a tough year,” Tinsley said. “Even with the economy taking a wallop over the past six months, they’ve managed to stabilize and continue out-performing their 2019 results, thanks to a continued preference for home-based care during the pandemic.”

Year-to-date, the HHI is up almost 48%, and over the past 12 months it has risen by nearly 83%.

Post-Acute Care Index

The monthly PAI from Stoneridge Partners looks at the broader post-acute care market, combining Amedisys’ and LHC Group’s stock values with values for senior living and rehabilitation companies Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group, Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

Eagle, Idaho-based The Pennant Group kicked off the last quarter of 2020 with a strong performance – its stock value rose by more than 6% in September, and in early October the company completed its acquisition of Harmony Hospice, with the expectation of more deals on the horizon.

Frisco, Texas-based Addus also saw slight gains in September, adding just less than 1% to its stock value compared to the previous month. Birmingham, Alabama-based Encompass Health’s stock value dipped by almost 0.4% in September compared to August, while Brentwood, Tennessee-based Brookdale’s stock value dropped almost 7.6% over that same period.

Quote Of The Month

“There has been an increased awareness of the breadth and depth of care at home, and this will have a long-standing impact on policy and politics as well,. There has been an absolute, exponential increase in respect for what you do in the home care setting. We took the stresses of the pandemic head-on and proved that care in the home is not only essential but [the best option].” – William A Dombi, National Association for Home Care & Hospice (NAHC) President

Read the Full Article Here: NAHC Pushing for Palliative Care, SNF-at-Home Medicare Benefits

Articles Featuring Stoneridge

View our quarterly M&A webinars on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Visit the Speaker Series Webinar Library on our website.

Voices: Ben Bogan, Partner, Stoneridge Partners

Stoneridge Partners President & Chief Executive Officer, Rich Tinsley is featured in Home Health Buyers, Sellers Headed Toward Frenzied Finish to M&A in 2020

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
(Home Health Index October 2020 | Stoneridge Partners)

Here are the results of the stock prices for the past two years:

Company 9/30/20 1 mos change YTD change 9/30/19 9/30/18
Amedisys 236.43 -2.26% +42.26% 131.36 123.61
LHC Group 212.56 +1.98% +54.30% 114.28 101.98
HH Index* 224.50 -0.30% +47.71% 122.82 112.80
S&P 3380.75 -3.54% +4.64% 2983.69 2924.87
Addus 94.51 +0.88% -2.79% 79.19 69.29

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

Enterprise Value (EV)

EV (in M) 9/30/20 9/30/19 9/30/18
Amedisys 7610 4390 3990
LHC Group 6160 3980 3520
HH Index Total 13770 8370 7510
Addus 1330 1070 857

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 9/30/20 9/30/19 9/30/18
Amedisys 386% 242% 252%
LHC Group 299% 195% 260%
HH Index Average* 343% 219% 256%
Addus 181% 188% 188%

Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 9/30/20 9/30/19 9/30/18
Amedisys 31.44 24.41 26.45
LHC Group 25.44 19.57 34.08
HH Index Average* 28.44 21.99 30.27
Addus 23.98 25.72 23.75

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index October 2020 | Stoneridge Partners)

Recent Transactions From Around The Country

  • A+ Solutions, an Ohio-based educational and psychological provider, was acquired by Refresh Mental Health, Inc., the national clinical leader in providing psychiatric, psychological and therapy services.
  • Bell Family, LLC, an Arizona-based home and community based-services (HCBS) provider, was acquired by The MENTOR Network, Inc., a national health care and human services company.
  • Spectrum Home Healthcare, LLC, an Arizona-based home health care provider, was acquired by The MENTOR Network, Inc., a national health care and human services company.
  • Hospice and home health provider LHC Group (NASDAQ: LHCG) has acquired Santa Rita Hospice in Aurora, Colo.
  • Maryland-based Hospice of the Chesapeake has acquired Hospice of Charles County

Exclusively Listed For Sale By Stoneridge Partners

Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky

Opportunity to establish a Houston-based hospice.  Low-census provider licensed for regions 3, 4, 5 and 6.

 Hospice /  Texas

Opportunity to establish a Medicare hospice and Medicare home health agency.  Greater Salt Lake city area.  Clean provider number with management and field staff in...

 Home Health /  Utah

Large, established franchise territory.  $2.5 million revenue.  Two offices with strong leadership teams in place.

 Home Care /  Michigan

ABA in-home and community-based autism treatment for children and families.  Located in Northeastern VA.  $1M in revenue.  Completely self-sufficient staff to remain.

 Other /  Virginia

Home health with $8+M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Private duty home care franchise.  $5M in revenue.  Quality track record with strong management team.  Excellent 18-year history,

 Home Care /  Colorado

Home care franchisee.  $8.4M in revenue.  Highly profitable agency.  Medicaid/private pay.

 Home Care /  Kentucky

Skilled home health agency.  JCAHO accredited, zero deficiencies.  Excellent reputation and referral relationships.  $400k in revenue, impressive growth potential.

 Home Health /  Colorado

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

In-home DME manufacturer.  Patented mobility system.  $7.7M+ in revenue.  GSA/VA contract.  Strong industry supplier partnerships.

 Other /  California

Medicare-certified home health and hospice provider.  $19M in revenue.  Attractive strategic geography.

 Home Health /  Ohio

$1M in revenue.  Small Medicare home health agency.  Region 5.

 Home Health /  Florida

Private pay home care.  $1.6M in revenue.  Profitable, great reputation.  Tenured staff.

 Home Care /  Illinois

Medicare-certified home health agency.  District 3.  Approximately $700k in revenue.  Accredited.

 Home Health /  Florida

Medicare-certified home health agency.  District 5.  Minimal census.  Accredited.

 Home Health /  Florida

Co-occurring, dual-diagnosis, addiction and mental health treatment center, 13- year history.  PHP, IOP, OP levels of care, prime location and setting, treating SUD and multiple...

 Behavioral Health /  Arizona

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois

$2.5M private pay home care agency.  20-year history, diverse referral sources.  Competitive bill rates.  Unique and successful recruiting and retention strategy.

 Home Care /  Virginia

$27M highly profitable, tech-enabled health care staffing company.  Provides on-demand workers for LTC facilities.  Impressive growth trends with extraordinary upside

 Other /  Midwest

Well-established and profitable franchisee.  Revenue of $4.9M.  Medicaid and private pay.

 Home Care /  Southwest

ABA in-home autism therapy for children.  $2.4M in revenue.  Strong growth and bottom line.

 Other /  California

Opportunity to acquire a Medicare-certified home health agency. JCAHO-accredited.  Zero deficiencies.  Region 9.

 Home Health /  Florida

Opportunity to acquire a Medicare-certified home health agency.  JACHO-accredited.  Zero deficiencies.  Minimal census.

 Home Health /  Pennsylvania

Opportunity to acquire a Medicare-certified home health agency.  Zero deficiencies.  Minimal census.

 Home Health /  Kansas

Rare southern hospice/home health CON opportunity.  $3.5M in revenue, 60+ hospice ADC.  Strong staff recruiting and retention.

 Home Health /  South

Medicaid/private pay, Medicare-certified.  $3 million in revenue.  CHAP-accredited.


4-star home health agency.  $2.5 million revenue.  Experienced management team.  Strong financials with outstanding local reputation.  Huge growth opportunities.

 Home Health /  Michigan

$1.5 million revenue chiropractic/physical therapy business.  High profit margin/low operating costs.  Diverse referral sources.

 Other /  Maryland

$3.3 million in revenue.  Autism center providing ABA, OT, PT and ST.  In-clinic and in-home services.

 Other /  Michigan

Non-skilled licensed home care organization.  Approx. $2 million in annual revenue.  Strong management team in place.  Southern California.

 Home Care /  California

Joint Commission-accredited psychiatric treatment center.  Residential, PHP, IOP, OP and home health services.  National referral base; reputation for excellence, innovation.  $3M EBITDA on $7M revenue...

 Behavioral Health /  Midwest

Central Ohio-based home health company with private pay.  $2.3 million in revenue.  13.5% EBITDA.  Strong growth trends, full staff in place.

 Home Health /  Ohio

$2+ million private pay.  Profitable with great reputation.

 Home Health /  Pennsylvania

Profitable hospice agency with $600,000 in revenue.  Ready to grow with full complement of staff in place.

 Hospice /  Pennsylvania

Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.

 Hospice /  Texas / Popular

$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.

 Home Health /  New Mexico

Home Health Index October 2020 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index.” Rich can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944.
Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group