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)

This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index going back to 2008.

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 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

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

Medicare/Medicaid certified home health organization.  $8+ million in annual revenue.  Diverse payor sources.  Multiple locations.

 Home Health /  Ohio

Approx. $700,000 non-skilled home health company.  Located in Florida's panhandle.  Accredited.  1/4 Private, 1/4 VA, 1/2 Medicaid Waiver.  All employees are W-2.

 Home Health /  Florida

$3.3 million in revenue.  Autism center providing ABA, OT, PT and ST.  In-clinic and in-home services.

 Other /  Michigan

Medicare-certified home health agency.  Minimal census.  Region 6.  Accredited.

 Home Health /  Texas

Non-skilled licensed home care organization.  Approx. $2 million in annual revenue.  Strong management team in place.  Southern California.

 Home Care /  California

Clean and accredited Medicare provider number.  Zero deficiencies.

 Home Health /  Connecticut

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

Large home care franchisee.  $6.5 million in revenue.  Private duty.  Attractive market with great growth potential.

 Home Care /  Florida

Non-medical home care franchisor.  Platform opportunity with national footprint.  Systemwide revenues more than $12 million.  Franchise locations in 16 states.

 Home Care /  Texas

$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

Medicare/Medicaid agency with $3.5 million in revenue.  Established 20+ years.  Great reputation in eastern Michigan.

 Michigan

CHAP-accredited private duty business.  $2.8 million projected 2021 revenue.  Workers' compensation primary source of revenue.  Regions 9, 10 and 11.

 Home Health /  Florida

$4 million I/DD provider.  Great reputation and long history of profitability.

 ID/DD /  Kentucky

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

 Home Health /  Massachusetts

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

 Home Health /  Tennessee

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

 Home Care /  Northeast

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

 Home Health /  Minnesota

$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

Clean and accredited hospice provider number in the coveted San Antonio marketplace.  Current license is valid until the end of May 2022.

 Hospice /  Texas

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

 ID/DD /  Midwest

$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

$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

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

 Hospice /  Texas

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

$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins.

 ID/DD /  North Carolina

$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.

 Home Health /  New Mexico

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

 Michigan

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

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

 ID/DD /  Georgia

Home Health Index March 2021 | 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