National Senior Living Operator Bucks Trend; Leads Post-Acute Stocks During Downturn

Home Health Index | 2021 March Update

Home health and post-acute care stockholders are likely glad that February is the shortest month of the year.

Nearly all the companies in the Stoneridge Partners Home Health (HHI) and Post-Acute Care Indices (PAI) took a hit last month – only Brookdale Senior Living Inc. (NYSE: BKD) saw a month-over-month jump in its stock value, thanks to the major home health and hospice deal it announced with HCA Healthcare (NYSE: HCA) on February 24th.

“People have speculated that Brookdale might offload its home health and hospice business to maximize value, and that finally came to fruition in February,” said Stoneridge Partners President Rich Tinsley. “Meanwhile, the other major industry players gave back some of the impressive gains they’ve made over the past year, but I expect that to turn around as our economy begins to grow again and we see deal activity continuing to ramp up.”

The HHI fell by nearly 11% in February as compared to January; the PAI likewise plummeted by almost 21%. Meanwhile, the S&P 500 was up almost 3% for the month.

Home Health Index

The monthly HHI from Stoneridge monitors the stock values of Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG).

Amedisys stock fell by more than 12% in February as compared to January. LHC Group’s stock fell by almost 9% during the same period after announcing lower than expected projections for the first quarter of 2021. Nevertheless, stock values for both companies are up more than 40% compared to 12 months ago, continuing a trend that has seen both companies’ stock soar over the past five years.

“LHC Group and Amedisys are still riding plenty of tailwinds,” Tinsley said. “Each has talked about setting up innovative models of care to shift patients away from skilled nursing facilities (SNFs), which continues to be a national priority. Each has also made progress in securing stronger contracting positions with payers outside of fee-for-service Medicare. There may be bumps in the road, but overall, I think they’ll continue on their current upward trajectory.”

Post-Acute Care Index

The Stoneridge Partners PAI combines stock values for Amedisys and LHC Group with values for Addus HomeCare Corporation (Nasdaq: ADUS), Encompass Health Corp. (NYSE: EHC), The Pennant Group, Inc. (Nasdaq: PNTG) and Brookdale.

Frisco, Texas-based Addus’ stock dropped almost 5% in February – but that’s likely to rebound in March, buoyed by investor interest in the company’s recently announced value-based care arrangement with Presbyterian Health Plan in New Mexico. Meanwhile, Birmingham, Alabama-based Encompass Health saw its stock dip just less than 1% last month, and stock values for Eagle, Idaho-based Pennant dropped by almost 5%.

As for Brookdale, the Brentwood, Tennessee-based company’s stock climbed by nearly 17% in February compared to January.

“Brookdale has been very active in vaccinating residents against the COVID-19 virus, which helps with restoring occupancy,” Tinsley said. “But the agreement with HCA Healthcare also has a lot to do with the surge. Home health and hospice multiples remain incredibly high, so this is a good time for Brookdale to cash in on its health care services segment.”

Brookdale announced toward the end of last month that it’s selling an 80% stake in its health care services business to HCA Healthcare for $400 million, pending all necessary regulatory approvals.

“As we pursued this business opportunity, it was extremely important to find the right strategic partner with the same dedication to care,” Brookdale CEO Lucinda Baier said during her company’s fourth-quarter earnings call. “Our new partnership is designed to deliver value for our shareholders, and it ensures continuity of quality care for our residents and patients while improving access to additional health care services.”

Quote of the Month

“As baby boomers age, we will need to be thinking about how we take care of a population of people that will have some disabilities as they age but are still going to find it attractive to be independent and continue to be as viable as long as they can.” – Grace Terrell, CEO of Eventus Whole Health, an operator of skilled nursing and assisted living facilities in five states across the Southern and Midwestern U.S.

Read the Full Article Here: Home is Where The Care Is

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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 March 2021 | Stoneridge Partners)

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

Company 2/28/21 1 mos change YTD change 2/28/20 2/28/19
Amedisys 253.64 -12.26% -13.53% 174.01 122.65
LHC Group 181.71 -8.74% -14.82% 121.46 106.39
HH Index* 217.68 -10.82% -14.07% 147.74 114.52
S&P 3841 +2.94% +2.26% 2954.22 2796.5
Addus 107.57 -4.53% -8.13% 76.27 66.35

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) 2/28/21 2/28/20 2/28/19
Amedisys 8550 6320 4010
LHC Group 5610 4400 3680
HH Index Total 14160 10720 7690
Addus 1630 1230 761

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

Company 2/28/21 2/28/20 2/28/19
Amedisys 413% 323% 247%
LHC Group 272% 214% 232%
HH Index Average* 343% 269% 240%
Addus 215% 206% 156%

Multiples of EV/EBITDA

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

Company 2/28/21 2/28/20 2/28/19
Amedisys 29.5 26.4 24.39
LHC Group 25.86 22.68 27.61
HH Index Average* 27.68 24.54 26.00
Addus 27.05 31.93 20.31

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care 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 March 2021 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Private-equity backed hospice and home health provider Charter Heath Group has acquired Serene Care Hospice in Omaha, NE
  • Private-equity backed hospice and home health provider Charter Heath Group has acquired Physmed in Omaha, NE

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 March 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