Home Health, Post-Acute Care Stocks Resume Climb Amid COVID-19 Spike

The latest Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices show steady gains for home health and post-acute care stock values in October, even in the midst of a nationwide spike in COVID-19 cases.

Rebounding from a small dip in September, the HHI rose nearly 6% in October compared to the previous month. The PAI posted an even stronger performance, rising by more than 7%. In contrast, the S&P 500 fell more than 3% during the same period.

“It’s encouraging to see home health and post-acute stock values are still making progress, even as our economy continues to be buffeted by the effects of COVID-19,” said Rich Tinsley, President and CEO of Stoneridge Partners. “And we expect a strong November moving forward. There weren’t many changes in the final home health payment rule for 2021, which added a sense of operational stability amid all the pandemic-related uncertainty.”

Home Health Index

The Stoneridge Partners HHI follows stock values for Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG), both of which had a strong showing in October.

Baton Rouge, Louisiana-based Amedisys saw its stock value jump by nearly 10%, coming back strong after a slight drop in the month of September. Amedisys CEO Paul Kusserow discussed his company’s run of success during a Q3 2020 earnings call on October 29th.

“I’m extremely proud of our performance this quarter, as we have once again generated prodigious clinical, operational and financial results, besting both our internal and external expectations in a tumultuous environment,” Kusserow said.

Lafayette, Louisiana-based LHC Group’s stock value repeated its solid September performance, increasing once again by almost 2% on a month-over-month basis.

Year to date, the HHI is up more than 56%; over the last 12 months it has risen by nearly 99%.

Post-Acute Care Index

The Stoneridge PAI combines the Amedisys and LHC Group stock values with results from Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group, Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

Brentwood, Tennessee-based Brookdale had the strongest showing last month. Its stock was up almost 16% in October as compared to September, representing a major turnaround after being battered for months by the effects of COVID-19 on senior living communities.

Stock values for Frisco, Texas-based Addus rose more than 3% in October according to the PAI, while Pennant stocks ticked up by more than 8% for the same period. Meanwhile, Encompass Health’s stock value dipped by almost 6%. The company’s home health and hospice segment has struggled recently to get access to patients in facility-based settings. Nonetheless, Encompass leadership remains optimistic about its long-term outlook.

“Since 2009, we have successfully managed through an economic recession, regulatory changes, sequestration and Medicare payment freezes and cuts,” Encompass Health President and CEO Mark Tarr said on October 29th during the company’s Q3 earnings call. “Now we can add a global pandemic to that list.”

Quote Of The Month

“Employment of home health aides and personal care aides is projected to grow 34% from 2019 to 2029, much faster than the average for all occupations, according to BLS. As the baby-boom generation ages and the elderly population grows, the demand for the services of home health aides and personal care aides will continue to increase.” – Robert Holly, Home Health Care News

Read the Full Article Here: Home Health Agencies Carving Out Bigger Role in US Economy

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.

The last Stoneridge Partners Speaker Series webinar of 2020 is tomorrow, and spots are going quickly for this in-depth conversation featuring our experienced advisors from the home health, home care, hospice and behavioral health industries. There’s still time for you to join us on Wednesday, November 18th at 1:30 pm ET – Register.

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 November 2020 | Stoneridge Partners)

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

Company 10/31/20 1 mos change YTD change 10/31/19 10/31/18
Amedisys 259.00 +9.55% +55.84% 128.52 111.2
LHC Group 216.55 +1.88% +57.19% 110.97 89.06
HH Index* 237.78 +5.92% +56.45% 119.75 100.13
S&P 3269.96 -3.28% +1.21% 3037.56 2722.05
Addus 97.57 +3.24% +0.36% 84.21 65.79

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) 10/31/20 10/31/19 10/31/18
Amedisys 8520 4570 3570
LHC Group 6800 3970 3220
HH Index Total 15320 8540 6790
Addus 1460 1110 744

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

Company 10/31/20 10/31/19 10/31/18
Amedisys 422% 242% 226%
LHC Group 330% 195% 238%
HH Index Average* 376% 219% 232%
Addus 198% 197% 163%

Multiples of EV/EBITDA

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

Company 10/31/20 10/31/19 10/31/18
Amedisys 32.29 24.12 23.66
LHC Group 28.10 19.53 31.19
HH Index Average* 30.20 21.83 27.43
Addus 26.17 26.87 20.62

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 November 2020 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Spiro Health acquired Absolute Respiratory Care in Johnston, Rhode Island
  • Idaho-based The Pennant Group acquired Riverside Home Health Care of Grants Pass, Oregon
  • Help at Home — a Chicago-based home- and community-based services provider that operates across 13 states — has been acquired by a consortium of private equity buyers

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

36 item(s) found

Posted 1 week ago by Jacob L

Full continuum, dual diagnosis substance use disorder treatment center in southwestern US.  $7 million revenue, nearly $2 million EBITDA TTM.  Ten in-patient beds, 28 sober...

 Behavioral Health /  Southwest / 15 views

Posted 2 weeks ago by Jacob L

Mental health primary - assessment, therapy, evaluation, mostly serving senior community.  Six locations in three Southeastern US states.  4,000 unique patients, served annually at 200...

 Behavioral Health / 20 views

Posted 1 month ago by Ben B

$9+ million home care agency.  Non-skilled.  99% private pay/LTC Insurance.  65-75% live-ins.  Accredited.  Multiple locations.  Experienced management team.

 Home Care /  New Jersey / 46 views

Posted 2 months ago by Ben B

Medicare/Medicare-certified home health agency.  Accredited.  Minimal census.

 Home Health /  Virginia / 53 views

Posted 2 months ago by Ted Cohen

$25+ million home health agency.  Medicaid/Medicare-certified.  95%+ Medicaid.  Multiple locations.  Experienced management team.

 Home Health /  Massachusetts / 69 views

Posted 3 months ago by Coley M

Very rare opportunity in a CON state.  Located in Davidson County in Nashville, TN.  2020 revenue in excess of $650,000.

 Home Health /  Tennessee / 116 views

Posted 4 months ago by Luci

Substance use disorder treatment center, PHP, IOP, co-occurring disorders.  2019 EBITDA of $400k. 2020 revenue $1.5 million, over $200k EBITDA TTM.  2021 trending $175k EBITDA...

 Behavioral Health /  Mountain West / 102 views

Posted 4 months ago by Ben B

Non-skilled home care company.  $10+ million in annual revenue.  Predominantly Medicaid.  Highly profitable.  Accredited.  Strong management team in place.

 Home Care /  Northeast / 143 views

Posted 5 months ago by Joe L

$1 million Medicare home health agency in northwest Minnesota.  Well-established.  Diverse referral sources.  Long history of excellent care.

 Home Health /  Minnesota / 109 views

Posted 5 months 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 / 154 views

Posted 7 months ago by Brian B

$10 million Medicaid personal care provider.  Large consumer-direct component.  History of steady growth.

 Home Care /  Minnesota / 210 views

Posted 7 months 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...

 ID/DD /  Midwest / 220 views

Posted 8 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.

 Hospice /  Texas / 228 views

Posted 8 months ago by Joe L

Fast growing private pay home care agency in northeast Tennessee.  $1.2+ million in revenue.  Quality focused and very profitable.

 Home Care /  Tennessee / 232 views

Posted 8 months ago by Brian H

$8 million Midwest ID/DD agency.  Highly profitable.  Consistent staff and clients.

 ID/DD /  Midwest / 227 views

Posted 8 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 / 212 views

Posted 8 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 / 242 views

Posted 10 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 / 325 views

Posted 10 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 / 331 views

Posted 11 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 / 347 views

Posted 11 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 / 332 views

Posted 11 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 / 358 views

Posted 11 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.

 ID/DD /  Ohio / 321 views

Posted 12 months ago by Jacob L

New software application helping build social connections among patients in recovery and giving them increased access to therapists. Potential investment opportunity. Facilitates total successful recovery...

 Other / 322 views

Posted 12 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 / 383 views

Posted 12 months ago by Ben B

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

 Hospice /  Texas / 388 views

Posted 12 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 / 367 views

Posted 12 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 / 358 views

Posted 12 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....

 Hospice /  Oklahoma / 373 views

Posted 12 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 / 319 views

Posted 12 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 / 329 views

Posted 12 months ago by Brian H

$2 million ID/DD agency in the Detroit area. Profitable service provider with existing management team in place.

 Michigan / 324 views

Posted 12 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 / 369 views

Posted 12 months ago by Jacob L

Boutique full-service clinical laboratory specializing in preventative diagnostic testing. Medicare- and Medicaid- certified, with insurance contracts in more than 20 southeastern states.

 South / 325 views

Posted 12 months ago by Brian H

ID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb.

 ID/DD /  Georgia / 335 views

Posted 12 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 / 402 views

Home Health Index November 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 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