Home Care, Home Health Stocks Send 2020 Off with Rally

Home health and post-acute care stocks ended 2020 with a bang according to the latest Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices.

After falling in November, the HHI made up the ground it lost and more in December, jumping up by nearly 15% over the previous month. The PAI continued its recent turnaround in December, climbing by almost 10% and capping off a string of three consecutive months of solid gains.

Both the HHI and PAI outperformed the S&P 500, which was up more than 2% in December compared to November.

“Home health and post-acute care operators had such a difficult year, yet they still came out of 2020 stronger than ever,” said Stoneridge Partners President and CEO Rich Tinsley. “Even with the challenges associated with the pandemic, they managed to pull through and capitalize on their ability to provide what patients want – quality care at home. And I think we’re seeing investors are a lot more comfortable in the health care space now that the vaccines are on the way.”

Home Health Index

Each month, the Stoneridge Partners HHI tracks stock values for Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG).

Amedisys – which just announced a new strategic partnership with infusion therapy company Option Care Health – recorded a gain of almost 20% last month compared to November. LHC Group also had a stellar month, with its stock rising by nearly 9% in December as the home health giant continued executing its strategy of tri-locating core services in key markets.

Once 2020 was officially in the books, Amedisys’ stock was up more than 76% for the year compared to the prior 12-month period. LHC Group’s stock was up by almost 55% over that same stretch.

“Home health providers like Amedisys and LHC Group not only survived the pandemic – they thrived,” said Tinsley. “I’m eager to see how they fare in 2021.”

Post-Acute Care Index

The Stoneridge Partners PAI combines stock values for Amedisys and LHC Group with those from post-acute providers Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group, Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

Half of the PAI providers saw double-digit stock gains in December. Besides Amedisys, Frisco, Texas-based Addus also had a strong performance, recording an almost 18% gain last month over November’s results. And Eagle, Idaho-based Pennant saw its stock rise by almost 13%, helping the Ensign spinoff to a very successful first full year as its own public entity.

The remaining companies in the PAI also contributed to the overall rally. Stocks for Birmingham, Alabama-based Encompass Health were up by more than 2% after revealing its plans to explore strategic alternatives for its home health and hospice business, including a sale or spinoff. And Brentwood, Tennessee-based Brookdale was up more than 4% in December, a promising sign for the senior living operator on the heels of news from the National Investment Center for Seniors Housing & Care (NIC) that senior housing occupancy in the U.S. had hit a record low in the fourth quarter of 2020.

Quote of the Month

“If there is a silver lining to COVID-19 and long-term care, the pandemic will hopefully accelerate the decades-long push towards expanding HCBS while also causing a reconceptualization of nursing home care. These are not competing goals but rather complementary ones.” – David Grabowski, Harvard Professor and Researcher

Read the Full Article Here: Investing More Heavily in Home-Based Senior Care Shouldn’t Mean ‘Abolishing Nursing Homes’

Articles Featuring Stoneridge

Home Health Care News Voices featuring Brian Bruenderman, Partner and Executive Vice President, Stoneridge Partners

Hospice News: Traditions Health Acquires Four Companies, Two of them Hospices. Stoneridge Partners, Partner & Executive Vice President Ben Bogan, acted as the sell-side advisor to Traditions (OK)

Save the date – the first Stoneridge Partners Speakers Series webinar of 2021 is February 10 at 1:30pm. Sign up here: Speaker Series

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.

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 January 2021 | Stoneridge Partners)

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

Company 12/31/20 1 mos change YTD change 12/31/19 12/31/18
Amedisys 293.33 +19.83% +166.2% 166.2 116.84
LHC Group 213.32 +8.66% +146.36% 137.76 93.44
HH Index* 253.33 +14.86% +157.23% 151.98 105.14
S&P 3756.07 +2.62% +116.45% 3230.78 2495.44
Addus 117.09 +17.97% +124.11% 97.22 68.06

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) 12/31/20 12/31/19 12/31/18
Amedisys 9920 5690 3700
LHC Group 6610 4750 3260
HH Index Total 16530 10440 6960
Addus 1780 1340 773

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

Company 12/31/20 12/31/19 12/31/18
Amedisys 491% 301% 228%
LHC Group 320% 231% 205%
HH Index Average* 406% 266% 217%
Addus 234% 224% 158%

Multiples of EV/EBITDA

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

Company 12/31/20 12/31/19 12/31/18
Amedisys 37.58 30.23 22.55
LHC Group 30.46 22.13 24.41
HH Index Average* 34.02 26.18 23.48
Addus 29.54 31.77 20.64

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 January 2021 | Stoneridge Partners)

Recent Transactions From Around The Country

  • The Pennant Group Inc. acquired Sacred Heart Home Health Care, which provides home health services in Phoenix and Tucson, Arizona.
  • Traditions Health, LLC, has purchased two hospice companies in Louisiana as well as two home health operations in Oklahoma. The hospice acquisitions – Grace Hospice & Palliative Care and Heritage Hospice – mark the company’s entry to the Louisiana market.
  • Bristol Hospice, a portfolio company of Webster Equity Partners, has purchased the California operations of Companion Hospice.

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 January 2021 | 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