The Ensign Group, Inc. ENSG recently announced that it has agreed to buy eight healthcare facilities in Alaska, Washington, Oregon, and California, subject to approvals and closing conditions. These operations are being acquired from Providence Home and Community Care, and the real estate assets are being purchased by Standard Bearer Healthcare REIT, Inc., Ensign’s real estate subsidiary.

This move will allow Ensign to enter new markets in Alaska and Oregon, enhancing its geographic reach and diversifying its portfolio. Six facilities will be managed by Ensign-affiliated operating companies, and two will be leased to third-party operators under long-term agreements. This transaction is expected to be effective in the next few months.

The acquisition deals have increased Ensign's portfolio to encompass 330 healthcare operations in 16 states. Of these, 32 also have senior living operations. The company, along with its subsidiaries like Standard Bearer, now owns 134 real estate properties.

The acquisitions are expected to provide Ensign with high-quality assets and new opportunities to establish clusters in emerging markets. These clusters enable operational efficiencies and improved resource allocation, benefiting patients and caregivers.

ENSG boasts a strong inorganic growth story. The company remains committed to acquiring real estate and leasing both successful and struggling skilled nursing, senior living and other healthcare-related operations. As the number of facilities rises, revenues from skilled services are expected to increase, supported by higher occupancy rates and patient days, indicating robust profit growth. ENSG’s EPS is forecasted to be between $5.46 and $5.52 for 2024, the midpoint of which suggests more than 15.1% growth from the 2023 figure of $4.77.

Ensign’s Price Performance

Shares of Ensign have risen 10.9% in the past three months compared with the industry’s 2.7% growth.

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ENSG’s Zacks Rank & Other Key Picks

The company currently carries a Zacks Rank #2 (Buy).

Investors can look at some other top-ranked stocks in the broader Medical space, like Doximity, Inc. DOCS, CareDx, Inc CDNA and Abbott Laboratories ABT. While Doximity currently sports a Zacks Rank #1 (Strong Buy), CareDx and Abbott Laboratories carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Doximity’s 2024 bottom line suggests 20% year-over-year growth. DOCS witnessed eight upward estimate revisions over the past 60 days against no movement in the opposite direction. It beat earnings estimates in each of the last four quarters, with the average surprise being 22.1%.

The Zacks Consensus Estimate for CareDx’s 2024 earnings is pegged at 43 cents per share, which indicates 167.2% growth from a year ago. In the past month, CDNA witnessed one upward estimate revision against none in the opposite direction.

The Zacks Consensus Estimate for Abbott Laboratories 2024 full-year earnings implies a 5.2% increase from the year-ago reported figure. ABT beat earnings estimates in three of the last four quarters, missing once, with an average surprise of 1.6%. The consensus mark for its current-year revenues is pegged at $42 billion, which indicates a 4.7% year-over-year increase.

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