Here's Why You Should Add Ensign Group Stock to Your Portfolio Now

The Ensign Group, Inc. ENSG is benefiting from strategic acquisitions, an expanding footprint, rising service revenues and a strong financial position. An optimistic 2024 business outlook also reinforces investors’ confidence in the stock.Zacks Rank & Price PerformanceEnsign Group carries a Zacks Rank #2 (Buy) at present. The stock has gained 11.5% in the past six months compared with the industry’s 2.9% growth. The Medical sector and the S&P 500 Composite have declined 9.7% and increased 10.3%, respectively, in the same time frame.ENSG's 6-Month Price Performance Image Source: Zacks Investment ResearchRising EstimatesThe Zacks Consensus Estimate for Ensign Group’s 2024 earnings is pegged at $5.49 per share, indicating an improvement of 15.1% from the year-earlier reading, while the same for revenues is $4.3 billion, implying a 14% increase from the prior-year actual. The consensus mark for 2025 earnings is pegged at $6.07 per share, indicating 10.7% growth from the 2024 estimate. The same for revenues stands at $4.7 billion, which indicates a rise of 11% from the 2024 estimate.ENSG’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 1.3%.Key DriversEnsign Group's revenue growth is primarily fueled by rising service revenues from its advanced healthcare offerings at skilled nursing, rehabilitation, and senior living facilities. The aging U.S. population is expected to sustain the robust demand for ENSG's senior living services. Additionally, the growing need for effective rehabilitation services, which assist individuals in resuming daily activities, is projected to drive revenue growth in the company's Skilled Services segment.ENSG anticipates revenues within the range of $4.25-$4.26 billion in 2024, the midpoint of which indicates 14.1% growth from the 2023 reported figure. Adjusted earnings per share are estimated to lie between $5.46 and $5.52 this year. The midpoint of the outlook indicates 15.1% growth from the 2023 reported figure.The strong performance of Ensign Group's Standard Bearer segment further boosts revenue. Through the Standard Bearer unit, the company generates rental income by leasing post-acute care properties, which it owns, to healthcare operators under triple-net lease agreements. These arrangements benefit Ensign Group by not only providing rental revenues but also shifting property-related expenses to the tenants.Ensign Group’s growth strategy, which is focused on acquisitions, is noteworthy. The company actively acquires facilities in various U.S. regions, fostering collaborations with local caregiving teams. This localized approach enables Ensign Group to understand regional healthcare needs better and deliver high-quality services to underserved communities.In December 2024, ENSG expanded its portfolio by acquiring eight healthcare facilities in Alaska, Washington, Oregon, and California. These strategic acquisitions enhance Ensign Group's healthcare portfolio and national footprint. Currently, the company operates 330 healthcare facilities across 16 states and owns 134 real estate assets. Acquisitions remain a top priority for management in its capital allocation strategy.To sustain its ongoing investments, maintaining a strong financial foundation is crucial. Ensign Group benefits from substantial cash reserves and adequate cash generation abilities. These financial strengths also support shareholder returns through share buybacks and dividends. The company has consistently increased its dividend payments for 22 consecutive years, demonstrating a commitment to rewarding shareholders. ENSG’s board of directors recently approved a 4.2% hike in its quarterly cash dividend to boost shareholders' value. Other Stocks to ConsiderSome other top-ranked stocks in the Medical space are Embecta Corp. EMBC, Veracyte, Inc. VCYT and CareDx, Inc CDNA. While Embecta and Veracyte sport a Zacks Rank #1 (Strong Buy), CareDx carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Embecta’s earnings surpassed estimates in each of the last four quarters, the average surprise being 39.5%. The Zacks Consensus Estimate for EMBC’s 2024 earnings indicates a 15.9% rise, while the same for revenues implies a deterioration of 1.3% from the respective prior-year figures. The consensus mark for EMBC’s earnings has moved 24.6% north in the past 30 days.The bottom line of Veracyte outpaced estimates in each of the trailing four quarters, the average surprise being 520.6%. The Zacks Consensus Estimate for VCYT’s 2024 earnings indicates a 137.3% rise, while the same for revenues implies an improvement of 22.9% from the respective prior-year figures. The consensus mark for VCYT earnings has moved 18.8% north in the past 30 days.CareDx’s earnings outpaced estimates in three of the trailing four quarters, the average surprise being 135.2%. The Zacks Consensus Estimate for CDNA’s 2024 earnings indicates a 167.2% rise, while the same for revenues implies an improvement of 17.5% from the respective prior-year tallies. The consensus mark for CDNA’s earnings has moved up 7.5% in the past 30 days.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Ensign Group, Inc. (ENSG): Free Stock Analysis Report Veracyte, Inc. (VCYT): Free Stock Analysis Report CareDx, Inc. (CDNA): Free Stock Analysis Report Embecta Corp. (EMBC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks