A Look at Proposed Tax Changes; Stock Values Stay Steady in April

Home Health Index | 2021 May Update

The Biden administration has proposed a number of changes to current tax laws, including potential increases to both the corporate and capital gains tax rates, in an effort to fund new infrastructure and social services priorities. While these proposed changes must still be approved by Congress, Stoneridge Partners President and CEO Rich Tinsley, JD, CPA says now is the time to consider how those changes might affect the future sale of your home health, home care, hospice or behavioral health company.

“The proposal essentially doubles the top federal tax rate on capital gains over $1 million, which could have a significant impact on sellers in the future,” said Tinsley. “Not only will it reduce how much an owner gets to keep after they leave the closing table, but it could give buyers more negotiating strength and have an effect on valuations.”

In a new article available at www.stoneridgepartners.com, Tinsley argues that owners thinking about a future exit strategy should keep a close eye on any upcoming tax moves – and reach out to an experienced advisor well in advance of a potential sale.

“Complex transactions like these take a lot of time and effort, and there’s always a risk that the sale won’t be completed before tax law changes go into effect,” he said.

Want to know more about how potential tax changes might affect a future sale of your home health, home care, hospice or behavioral health company? Click here to read the full article on the Stoneridge Partners website.

Home Health and Post-Acute Care Indices

After a strong rebound in March, stock values for the companies tracked by the Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) indices continued their steady climb in April.

The HHI was up by nearly 4% compared to the previous month, and the PAI performed similarly – up nearly 5% for the same time period. Both indices closely mirrored the S&P 500, which climbed by almost 5% in April.

Home Health Index

The Stoneridge Partners HHI monitors the stock values of Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG). LHC Group outperformed its March results, with stock values rising by nearly 8% in April. Meanwhile, Amedisys stock stayed relatively flat, rising by less than 1%.

Post-Acute Care Index

Stock values for Amedisys and LHC Group are combined with monthly results for Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living, Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG) to make up the Stoneridge Partners Post-Acute Care Index (PAI).

Like March, April was a mixed bag for the additional companies tracked by the PAI.

Birmingham, Alabama-based Encompass Health extended its gains from last month, with its stock values rising by nearly 4%. The next few months will likely prove to be crucial for Encompass; the company is exploring a potential sale or spinoff and searching for a new CEO to lead its home health and hospice business. Meanwhile, stocks for Frisco, Texas-based Addus also moved in the right direction this month, coming off a dip in March to post a gain of almost 1% in April.

However, Eagle, Idaho-based Pennant and Brentwood, Tennessee-based Brookdale found themselves on the other end of the spectrum in April. After tumbling by more than 12% in March, Pennant’s stock values took another hit last month, falling by another 13%.

And after a strong performance in March, April was a reversal of fortune for Brookdale, with its stock values falling by more than 2%.

Quote of the Month

“I think the pandemic has increased awareness in this area. Mental health is real, and it’s not something that just impacts other people. We all could be one traumatic experience away from trouble.” – Alicia Leslie, Behavioral Health Manager for Fort HealthCare

Read the Full Article Here: COVID-19 and Mental Health

Articles Featuring Stoneridge

Sign up for our next Speaker Series: June 8, 2021, 2:30pm.

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 May 2021 | Stoneridge Partners)

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

Company 4/30/21 1 mos change YTD change 4/30/20 4/30/19
Amedisys 269.85 +0.83% -8.00% 184.16 120.25
LHC Group 208.27 +7.78% -2.37% 129.99 111.19
HH Index* 239.06 +3.74% -5.63% 157.08 115.72
S&P 4181.17 +4.72% +11.32% 2912.43 2931
Addus 105.8 +.081% -9.64% 81.02 67.65

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) 4/30/21 4/30/20 4/30/19
Amedisys 9560 6470 4480
LHC Group 6430 4220 3800
HH Index Total 15990 10690 8280
Addus 1780 1130 832

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

Company 4/30/21 4/30/20 4/30/19
Amedisys 452% 331% 259%
LHC Group 312% 203% 210%
HH Index Average* 382% 267% 235%
Addus 232% 189% 161%

Multiples of EV/EBITDA

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

Company 4/30/21 4/30/20 4/30/19
Amedisys 30.03 27.04 25.43
LHC Group 27.49 20.78 23.07
HH Index Average* 28.76 23.91 24.25
Addus 31.08 29.32 21.23

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 May 2021 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Family Tree In-Home Care acquired HomeCare of the Rockies.
  • AMN Healthcare Services Inc. acquired full-service virtual care management company Synzi.
  • Senior Care Authority, a senior placement and elder care consulting franchise, has acquired Beyond Driving with Dignity.

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 May 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