Home Health Stocks Climb Higher than Ever

For the second consecutive month, the market value of three of the most prominent publicly traded home health companies hit a record high and outpaced the S&P 500 Index overall.

The Stoneridge Partners Home Health Index, which tracks the monthly average market performance of LHC Group (Nasdaq: LHCG), Almost Family (Nasdaq: AFAM) and Amedisys (Nasdaq: AMED), grew 0.63% in May 2016, compared with April 2016, when the Home Health Index hit its previous record high.

The Home Health Index recorded a year-to-date increase of 20.35%, and is up 26.84% for the trailing 12-month period.

Screen Shot 2016 06 07 at 11 12 40 AM

Strong home health valuations have resulted in an active M&A market with robust activity and interest, according to Benjamin Bogan, partner with Stoneridge Partners.

“Valuations are strong for the large publicly traded home health companies with multiples north of 10 on average and selling prices above one times revenue,” Bogan said in a prepared statement. “While smaller, privately held companies won’t see equal valuations, they will track those of their larger brothers and sisters in direct proportion.”

Out of the three companies tracked by the Home Health Index, LHC Group saw the biggest increase in May, with its share price rising 4.12%.

Addus HomeCare (Nasdaq: ADUS), which is not tracked by the Home Health Index, saw its share price fall 3.11% in May.

The S&P 500, which is used as a benchmark for the Home Health Index, rose 1.53% in May.

Written by Mary Kate Nelson

Mary Kate Nelson on EmailMary Kate Nelson on LinkedinMary Kate Nelson on Twitter
Mary Kate Nelson
Assistant Editor at Aging Media Network
When not in the newsroom, Mary Kate can reliably be found reading on her back porch, marathoning TV shows she’s already seen or overspending at Trader Joe’s.

By continuing to use the site, you agree to the use of cookies. More Information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this. For more information, see our cookie policy