LifePoint (LPNT) Sells Unit to Focus on High-Growth Markets

LifePoint Health, Inc. LPNT has completed the sale of its ownership interest in Rockdale Medical Center and associated assets to Piedmont Healthcare, an Atlanta-based healthcare delivery system.  

LifePoint Health now operates more than 70 hospital campuses and regional health systems, as well as physician practices, outpatient centers, and post-acute service providers in 22 states.

The company has undertaken a number of divestitures in recent years to realign its business and focus on growing in new attractive markets.

Year to date, the stock has gained 3.3%, which is almost in line with the industry’s growth of 3.8%.

Some of its recent divestitures include the sale of Putnam Community Medical Center, Lakeland Community Hospital, Northwest Medical Center and Russellville Hospital and River Parishes Hospital.

The funds from these divestitures are being used to lower its high debt level and pursue accretive acquisitions in high-growth markets. The company has sealed a number of acquisitions and strategic partnerships in recent years.

These deals have supplemented the company’s efforts to achieve organic growth in its existing markets. Newly acquired hospitals have accounted for the majority of the company’s growth.

From 2014-2016, acquisitions provided significant EBITDA growth opportunities. The acquisitions are in a transitional phase of outsized margin improvement in 2017, moving toward low double-digit margins. Earlier, the company said that it expects contribution to net revenues ($6.5 billion to $6.6 billion guided) of more than $2 billion and approximately $55 million of incremental adjusted EBITDA in 2017.

LifePoint carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the healthcare sector are UnitedHealth Group Inc. UNH, Centene Corp. CNC and Select Medical Holdings, Corp. SEM. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

UnitedHealth Group, one of the leading diversified health and well-being companies has seen its Zacks Consensus Estimate for 2017 and 2018 being revised upward by 1% and 0.2%, respectively, in the past 90 days.

Centene, a multi-national healthcare company of the United States witnessed its Zacks Consensus Estimate for 2017 and 2018 being revised upward by 3.4% and 2.4%, respectively, in the past 90 days.

Select Medical, another leading managed care company has also seen its Zacks Consensus Estimate for 2017 and 2018 being revised upward by 7% and 10%, respectively, in the past 90 days. The company posted positive surprises in the last two quarters as well.

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