Nursing Home Giant Ensign Has $1 Billion in Cash and Credit — and Says 50 to 60 Acquisitions a Year Are ‘Doable’

The Ensign Group just told Wall Street what it plans to do with more than $1 billion in cash and available credit: keep buying.

The nationwide operator, one of the largest skilled nursing companies in the country, raised its full-year guidance Wednesday after a third quarter marked by rising occupancy, stronger Medicare revenue and an acquisition pace that shows no sign of slowing. Buying 50 to 60 facilities a year is “doable,” Chief Investment Officer Chad Keetch said on the company’s earnings call — and leadership capacity, pricing and underwriting discipline are the only real brakes.

The Numbers Behind the Optimism

Same-store occupancy climbed to 84.1% in the quarter, while facilities still transitioning into the Ensign portfolio ran even hotter at 86.1%. Skilled nursing days grew 7.2% year over year, and Medicare revenue jumped 11.1%. Managed care revenue rose 9.1%.

CEO Barry Port spent much of the call making a quality case. CMS cycle-one survey results at Ensign facilities beat the average of the states it operates in by 15% and county averages by 28%, he said. More than 80% of the company’s skilled nursing operations now carry a four- or five-star quality rating — and many of the facilities it acquired started out at one or two stars.

Short-stay residents improved functionally at rates 30% better than industry peers in Ensign’s states, Port said, and long-stay antipsychotic medication rates ran 28% better.

The quality push matters right now. A media outlet affiliated with a short-selling hedge fund alleged pervasive staffing shortfalls at Ensign in a June report. No federal investigations or regulatory actions are known to be underway, and the company argues its own staffing results — RN retention 11% better than the average across its 18-state footprint, administrator turnover 45% below the CMS-measured state average — speak for themselves.

Where the Money Is Going

Ensign announced 22 acquisitions during the quarter and the period since, including nine in Florida, seven in Colorado, four in Washington and two in Texas. Nineteen are leased operations; three are real estate purchases.

Florida deserves a note. Port called the state a natural market for skilled nursing given its size and demographics, while acknowledging its litigation environment has given the company pause. Favorable insurance rates, a deep labor pool and a manageable regulatory climate tipped the scales.

The company now runs 418 healthcare operations across 18 states and owns 189 real estate assets. Deal flow is coming from every direction — large portfolios, single buildings, nonprofit divestitures and real estate investment trusts looking for replacement operators, Keetch said.

It’s a market that has been tilting toward consolidation for months — nursing homes leaning on agency staff get sold more often, one recent industry report found — and Ensign’s scale gives it an edge in picking through the inventory.

For an industry still digging out of a staffing hole and bracing for tighter Medicaid money, Ensign’s message to the market was blunt: the strong are getting bigger.