Growth of Home Health, Post-Acute Care Stocks Continues in August
After a strong surge in July, stock values for home health and post-acute care providers moderated but continued their upward trajectory in August according to the new Home Health and Post-Acute Care Indices from national healthcare mergers and acquisitions firm Stoneridge Partners.
The home health sector has continued its steady rebound from the spring’s coronavirus-related disruption, while operators in the broader post-acute care landscape have also made positive gains in the face of persistent headwinds. Overall, the Home Health Index (HHI) added to July’s gains by nearly 5% in August, and the Post-Acute Care Index (PAI) grew by almost 2% over the same period.
“While gains like those we saw in July are exciting, I think this month’s numbers tell an even better story,” said Stoneridge Partner President and CEO Rich Tinsley. “Large swings – even in a positive direction – can mean volatility, but sustained, incremental gains show some stabilization in the market. Home health providers have pretty much said their volumes have recovered to pre-COVID-19 levels — or even higher. I’m hopeful this means we’re back on track for consistent growth.”
The S&P 500 also showed improved performance, up more than 7% in August compared to the previous month.
Home Health Index
The Stoneridge Partners HHI tracks the stock values of Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (Nasdaq: LHCG), two of the country’s largest home health providers. Amedisys and LHC Group both have their headquarters in Louisiana.
In August, Amedisys saw its stock value rise more than 3% over July’s results. LHC Group’s stock value saw even larger gains — improving nearly 7% on a month-over-month basis.
“Both companies announced some interesting moves in August,” Tinsley said. “LHC Group announced another joint venture, this time with University Health Care System. On its end, Amedisys beefed up its personal care network by teaming up with BrightStar Care, a huge home care franchise company.”
Year to date, the HHI is up more than 48%.
Post-Acute Care Index
The PAI combines Amedisys and LHC Group stock values with values for Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).
LHC Group and Amedisys helped to buoy the PAI in August, as Brookdale, Encompass Health and Addus all saw small dips in their stock values.
Birmingham, Alabama-based Encompass Health’s stock value was down just more than 4% in August compared to July, while Brentwood, Tennessee-based Brookdale’s stock value dropped less than a percent over that same period. Frisco, Texas-based Addus — which recently announced plans to exit the Nevada market due to Medicaid rate challenges — saw its stock dip almost 3% in August compared to the previous month.
But the strongest performance in the August PAI belonged to Eagle, Idaho-based The Pennant Group, which saw its stock value soar by almost 48% in August compared to July.
Quote Of The Month
“Many people living with serious medical illnesses also suffer from comorbid behavioral health issues,” according to a recent report from the Center to Advance Palliative Care (CAPC).
Read the Full Article Here: Providers Seek to Integrate Behavioral Health with Palliative Care
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.
Our Partner and Executive Vice President Benjamin Bogan discussed the current state of the health care M&A market in Home Health Care News.
Our Associate Partner Tony Siebel discusses the current state of the M&A market for Medication-Assisted Treatment Clinics in our most recent Stoneridge Q&A.
Traditions Health Acquires Physician’s Choice Hospice and Palladium Hospice. Our Partner and Executive Vice President Ben Bogan acted as sell side advisor to Palladium Hospice.
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)
This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index going back to 2002.
This is a 12 month trailing chart of the HH Index compared to the actual prices of the individual companies that make up the chart.This graph displays HH Index performance since 2002.
This graph compares the HH Index to the price of Addus stock (non-Medicare).(Home Health Index September 2020 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
| Company | 8/31/20 | 1 mos change | YTD change | 8/31/19 | 8/31/18 |
| Amedisys | 241.9 | +3.31% | +45.55% | 128.71 | 125.01 |
| LHC Group | 208.44 | +6.83% | +51.31% | 118.5 | 98.93 |
| HH Index* | 225.17 | +4.91% | +48.16% | 123.61 | 111.97 |
| S&P | 3505 | +7.15% | +8.49% | 2926.46 | 2884 |
| Addus | 93.66 | -2.85% | -3.66% | 87.98 | 64.90 |
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) | 8/31/20 | 8/31/19 | 8/31/18 |
| Amedisys | 8210 | 4490 | 3980 |
| LHC Group | 6440 | 4130 | 3430 |
| HH Index Total | 14650 | 8620 | 7410 |
| Addus | 1390 | 1150 | 804 |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
| Company | 8/31/20 | 8/31/19 | 8/31/18 |
| Amedisys | 416% | 248% | 252% |
| LHC Group | 308% | 203% | 253% |
| HH Index Average* | 362% | 226% | 253% |
| Addus | 188% | 203% | 176% |
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
| Company | 8/31/20 | 8/31/19 | 8/31/18 |
| Amedisys | 33.92 | 24.92 | 26.41 |
| LHC Group | 30.79 | 20.33 | 33.19 |
| HH Index Average* | 32.36 | 22.63 | 29.80 |
| Addus | 24.93 | 27.74 | 22.30 |
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 September 2020 | Stoneridge Partners)
Recent Transactions From Around The Country
- Jet Health Inc., a home health provider, acquired Carrington Hospice Care Inc.
- Bristol Hospice acquired Irvine-based Remita Health, a hospice provider with six locations in Arizona.
- Alleo Health System acquired Atlanta-based Angel Heart Hospice.
- Actinium Healthcare Holdings – a Dallas, Texas-based private equity firm – acquired Central Home Health Services of Texas Inc.
- Hometown Healthcare Management acquired Lane Nursing Home.
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Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners
Posted 2 days ago by Ben B
Non-skilled licensed home care organization. Approximately $2 million in annual revenue. Strong management team in place. Southern California.
Home Care / California / 4 views
Posted 3 weeks ago by Coley M
$15 million private duty Medicaid agency. $3 million EBITDA. Contracted with Seven state Aging Service Access Points (ASAP)
Home Health / Massachusetts / 33 views
Posted 1 month ago by Brian B
$10 million Medicaid personal care provider. Large consumer-direct component. History of steady growth.
Posted 1 month ago by Brian H
$50 million ID/DD platform opportunity. Multi-state, Midwest. Tenured management team to stay in place. Double digit year over year organic growth. Significant future opportunities for...
Posted 2 months ago by Partners
$4.2 million home health agency in Houston, Texas. 17.5% bottom line. Large coverage area. Diverse referral network. Fully staffed with no clinical issues.
Home Health / Texas / 81 views
Posted 2 months ago by Jacob L
Outpatient facility offering mental health and substance use disorder treatment, including co-occurring/dual diagnosis therapy and MAT. One company with four reputable brands operating in six...
Behavioral Health / Midwest / 99 views
Posted 2 months ago by Joe L
Clean and accredited hospice provider number in the coveted San Antonio marketplace. Current license is valid until the end of May 2022.
Posted 3 months ago by Joe L
Fast growing private pay home care agency in north east Tennessee. $1.2+ million in revenue. Quality focused and very profitable.
Posted 3 months ago by Brian H
$8 million Midwest ID/DD agency. Highly profitable. Consistent staff and clients.
Posted 3 months ago by Partners
$2.1 million revenue. Dallas/Ft. Worth based Medicaid pediatric therapy business. 16% EBITDA margin. More than 300 patients. Also services San Antonio and surrounding areas.
Home Health / Texas / 101 views
Posted 3 months ago by Partners
$12 million Medicaid home care business. Experienced management team in place. Strong financials, long-term consistent growth. EBITDA over $1 million.
Home Care / Pennsylvania / 124 views
Posted 3 months ago by Brian B
Illinois Medicaid pediatric provider. $3 million annual revenue. Long history in the market. Recent rate increase.
Home Health / Illinois / 122 views
Posted 3 months ago by Ted Cohen
$1+ million non-skilled home care agency. 20% AEBITDA. 90% of revenue from Medicaid Waiver program. Includes Medicare-certified, ACHC accredited home health license. Management team in...
Posted 4 months ago by Partners
$2.3 million revenue home health agency located in Arlington, TX. Growing and profitable. Management staff in place. No compliance issues.
Home Health / Texas / 153 views
Posted 5 months ago by Jacob L
Three locations in southeastern US. Real estate is also for sale. Residential, PHP, IOP and sober living programs; detox is outsourced through BioCore. More than...
Behavioral Health / Southeast / 179 views
Posted 5 months ago by Partners
Medicare-certified home health agency. Licensed to service Chester, Lancaster, and Delaware counties. ACHC-accredited. Minimal census of 20+/- patients.
Home Health / Pennsylvania / 168 views
Posted 5 months ago by Partners
Medication-assisted treatment/office-based addiction treatment center utilizing Suboxone, Vivitrol and Zubsolv; also specializing in pain management, group counseling and hormone replacement therapy. Three locations in a...
Behavioral Health / Southwest / 176 views
Posted 5 months ago by Partners
$4.9 million Medicare home health agency located in Phoenix, Arizona. Showing strong year over year revenue growth since 2018. Diverse referral sources, well run with...
Home Health / Arizona / 193 views
Posted 5 months ago by Partners
Licensed home care services agency with services in five boroughs. Approximately $20 million in revenue and a long-standing history in the community.
Posted 5 months ago by Partners
$5 million Midwest-based ABA provider. Day supports and counseling. Highly profitable and respected. CARF accredited. Contracted with state and insurance companies.
Behavioral Health / Midwest / 206 views
Posted 5 months ago by Coley M
$1.5 million private duty home health agency in eastern Michigan. Profitable and well-positioned for additional growth. Self-sufficient staff in place. 82 long-term clients.
Home Health / Michigan / 203 views
Posted 5 months ago by Partners
Medication-assisted treatment center. Suboxone only. Strategic location between Louisville and Lexington, Kentucky. Great reputation with strong clinical team in place. 110 clients with room to...
Behavioral Health / Kentucky / 205 views
Posted 5 months ago by Partners
Ohio ID/DD provider with $1.1 million revenues. A high-quality operation with existing staff to manage the transition to new ownership.
Posted 5 months ago by Partners
Large Medicaid home care agency. Steady consistent growth. Nice platform opportunity.
Home Care / Connecticut / 209 views
Posted 6 months ago by Joe L
$3.5 million all-Medicaid home care company located in Houston, TX. 20%+ year-over-year revenue growth since 2016.
Posted 6 months ago by Joe L
Home health and hospice covering 10 counties in west Texas/eastern New Mexico with $5 million in revenue. No clinical issues, under CAP. Very profitable. Easily...
Home Health / Southwest / 221 views
Posted 6 months ago by Ben B
Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.
Posted 6 months ago by Ted Cohen
Home health agency and adult day care center with $12+ million in annual revenue. Home health represents 85% of revenue while adult day represents 15%...
Home Health / South Atlantic / 223 views
Posted 6 months ago by Jacob L
$5+ million 37-bed outpatient treatment center. Fully accredited and recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of...
Behavioral Health / Arizona / 205 views
Posted 6 months ago by Jacob L
Partial hospitalization treatment program/intensive outpatient program seeking strategic partner. Strong census and revenue growth. No direct competition for niche market.
Behavioral Health / Georgia / 207 views
Posted 6 months ago by Jacob L
Treatment center with 28 beds, intensive outpatient program capacity of 40, full continuum of substance use disorder services and dual diagnosis treatment capability. JCAHO accreditation...
Behavioral Health / Texas / 217 views
Posted 6 months ago by Ted Cohen
$5+ million home health, home care, case management, and hospice company. Approximately 15% revenue from hospice, other service line revenues distributed relatively evenly. Multiple locations....
Posted 6 months ago by Partners
Medicare-certified home health agency with $9.6 million in annual revenue. 98% traditional Medicare and other PPS payors. Medicare- and Medicaid-certified with multiple locations.
Home Health / Oklahoma / 202 views
Posted 6 months ago by Brian H
$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins.
ID/DD / North Carolina / 207 views
Posted 6 months ago by Ben B
$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.
Home Health / New Mexico / 206 views
Posted 6 months ago by Ted Cohen
Medicare and Medicaid certified home health agency. $16.5 million in annual revenue with continued growth. 90%+ Medicaid. Strong management in place. Accredited.
Home Health / Massachusetts / 233 views
Posted 7 months ago by Ben B
$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4.5-star rating by CMS.
Home Health / Illinois / 215 views
Posted 7 months ago by Brian H
ID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb.
Posted 7 months ago by Ted Cohen
Medicare-certified home health agency. Approximately $3.8 million in revenue with 17% bottom line. Located in Districts 9 and 10. Revenues split evenly between districts. Accredited....
Home Health / Florida / 235 views
Posted 7 months ago by Partners
$11 million multi-location addiction treatment center. Located in Southern California. 21% bottom line. Strong growth trends. JCAHO-accredited.
Behavioral Health / California / 220 views
Home Health Index September 2020 | Stoneridge Partners
From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at rich@stoneridgepartners.com or (239) 561-0826 and toll-free 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
