Key Takeaways
💸 Dividend yield remains low at 0.19%, but Ensign has increased its dividend for 17 consecutive years, supported by a conservative 4.74% payout ratio.
💰 Operating cash flow for the trailing twelve months reached $347.2 million, with $188.9 million in free cash flow, reflecting healthy internal funding and reinvestment capacity.
📊 Analysts maintain a favorable outlook with a consensus price target of $165.17, and recent upgrades highlight strong earnings and operational execution.
📈 First-quarter earnings showed 16% revenue growth and a 16.6% rise in net income, with management raising full-year guidance and continuing to expand through acquisitions.
Last Update: 5/1/25
Ensign Group (ENSG) operates hundreds of skilled nursing, assisted living, and rehabilitative care facilities across the U.S., supported by a decentralized model that puts operational control in the hands of local leadership. Backed by consistent revenue growth, rising earnings, and a 17-year streak of dividend increases, the company continues to expand its footprint through disciplined acquisitions while maintaining a strong balance sheet.
The management team, led by CEO Barry Port, has prioritized financial stability and operational efficiency over aggressive growth. With a forward P/E around 20, steady free cash flow, and a history of navigating regulatory and labor-related challenges, Ensign offers a dependable profile for long-term investors seeking sustainable performance.
Recent Events
Ensign recently posted another quarter of solid growth. Revenue came in strong, up 16.1% year-over-year, while earnings rose by an equally impressive 16.6%. That kind of performance in a mature healthcare segment is worth pausing on. It shows that the company isn’t just treading water—it’s actively growing while staying disciplined.
Management continues to pursue bolt-on acquisitions, targeting facilities that fit their operational model. These moves are calculated, not aggressive, and they don’t seem to be overpaying or straining the balance sheet in the process.
They also kept their dividend habit alive. The latest payout was announced with a March 31 ex-dividend date and distributed on April 30. It’s another small but consistent return to shareholders—a gesture that, while modest in size, signals the company’s ongoing commitment to capital stewardship.
Key Dividend Metrics
📈 Forward Dividend Yield: 0.19%
💰 Annual Dividend Rate: $0.25
🧮 Payout Ratio: 4.74%
📆 Dividend Growth Streak: 17 years
🧷 5-Year Average Yield: 0.25%
📊 Ex-Dividend Date: March 31, 2025
💸 Dividend Date: April 30, 2025
Dividend Overview
Let’s not sugarcoat it—the dividend yield is low. At 0.19%, it’s nowhere near what you’d call income-generating. But here’s the thing: not every dividend stock is about high yield. Sometimes, it’s about what the dividend represents. In Ensign’s case, it signals confidence. The company is generating strong free cash flow, keeping debt manageable, and still setting aside cash for shareholders.
The payout ratio is especially telling. At just under 5%, the company is barely touching its earnings to pay the dividend. That gives them plenty of room to reinvest in operations, improve facilities, and even make acquisitions without needing to compromise returns to shareholders.
Cash on hand sits comfortably at around $344 million, while operating cash flow over the past year reached $384 million. Even though levered free cash flow is slightly negative—largely due to growth initiatives—it doesn’t raise red flags in this context. Ensign’s cash engine remains intact and strong.
Dividend Growth and Safety
Here’s where long-term investors can start to smile. Ensign may not hand out big checks today, but the growth story is compelling. This company has increased its dividend for 17 straight years. That’s a track record built on real performance, not financial engineering.
And the increases aren’t just for show. They reflect a business that’s grown its earnings and expanded its operations consistently. During the pandemic, while peers paused or cut payouts, Ensign quietly kept going. No panic moves. Just calm, steady performance through a very tough environment.
The dividend’s safety profile is about as strong as it gets. With a payout ratio that low and earnings continuing to rise, it’s hard to see a scenario where the dividend comes under pressure. Even if the company ran into a difficult year, it could easily absorb the impact without skipping a beat.
For investors looking for a dependable stream of growing income—not tomorrow, but five or ten years down the line—Ensign offers something very rare: a company that plays the long game and sticks to it.
Cash Flow Statement
Ensign Group’s cash flow profile over the trailing twelve months shows a strong foundation of operational consistency, with $347.2 million in operating cash flow. This level of generation, while slightly down from the previous year’s $376.7 million, still marks a significant leap from earlier periods and highlights the company’s ability to produce solid internal cash through its healthcare operations. Free cash flow came in at $188.9 million, reflecting meaningful capacity to reinvest while still maintaining liquidity.
On the investment side, cash outflows nearly doubled to $390 million, much of which was tied to capital expenditures—$158.2 million compared to $106.2 million a year prior. These figures suggest Ensign is actively reinvesting to expand or upgrade its facilities. Financing activities remained minimal, with little debt issuance and a modest $2.2 million net cash outflow, including minor debt repayments and limited share repurchases. The company ended the period with a cash balance of $464.6 million, offering flexibility to manage future growth and volatility.
Analyst Ratings
Analysts have kept a steady, optimistic tone when it comes to Ensign Group. Recently, Stephens & Co. reaffirmed their overweight stance and nudged their price target from $155 to $160 📈. The reasoning? Solid earnings growth and how smoothly Ensign has folded in its recent acquisitions. They liked the consistency and saw no signs of the company slowing down operationally.
Macquarie also stayed positive, maintaining their outperform rating and slightly raising their target from $165 to $166 🚀. Their note pointed to Ensign’s ongoing revenue growth and the efficiency at which it’s running its decentralized model — a setup that has become a real asset in navigating a complicated healthcare landscape.
On the flip side, Truist Securities held onto their hold rating but pulled their target back from $170 to $155 🟡. They flagged potential pressure points like rising labor costs and tighter reimbursement margins — both real risks in the sector that could weigh on near-term results if not managed carefully.
As of now, the average consensus price target sits at $165.17 💵. With shares currently trading below that, there’s a clear expectation among analysts for further upside — backed by consistent execution and strong fundamentals.
Earnings Report Summary
Strong Start to the Year
Ensign Group kicked off 2025 with a solid first quarter, putting up numbers that show its business is still running on all cylinders. Earnings per share came in at $1.52, comfortably ahead of what most expected. Revenue reached $1.17 billion, which is a 16% jump compared to last year. That’s not a small move, especially in a sector where growth like this is often hard-won. Net income also came in strong at just over $80 million, and adjusted figures showed even more strength with an 18% rise year over year.
The company’s skilled nursing facilities continue to do a lot of heavy lifting. Occupancy rates moved higher, with existing locations reaching 82.6% and newer ones pushing past that. Skilled care days rose too—up nearly 8% at established facilities and almost 10% at the newer ones they’ve taken over. That kind of utilization improvement doesn’t just happen; it points to a strong operating model and, frankly, patient demand.
Confident Guidance and Expansion
Leadership clearly liked what they saw from the business this quarter. They bumped up their full-year earnings guidance to a range between $6.22 and $6.38 per share, which is a solid increase. Revenue guidance was raised too, now expected to land somewhere between $4.89 billion and $4.94 billion. That kind of upward adjustment isn’t made unless management feels confident about the road ahead.
They’ve been busy on the expansion front as well. In the first quarter alone, Ensign added 19 more operations, including eight where they picked up the real estate along with the business. Since the start of 2024, that brings the total number of new operations to 47. It’s a clear signal they’re not sitting still. Growth through acquisition continues to be a core part of their playbook.
Leadership Commentary and What’s Next
CEO Barry Port was upbeat in his comments following the report. He credited much of the quarter’s success to the company’s decentralized model and the commitment of local teams. He also emphasized that this kind of performance didn’t come easy—it was the result of consistent execution and strong clinical outcomes.
Looking ahead, Ensign’s staying focused on what it knows best: disciplined growth, solid operations, and smart expansion. They’re keeping a close watch on Medicaid-related changes at the state level, which could influence reimbursement rates, but there doesn’t seem to be any panic from the top. The tone remains steady and optimistic. With momentum like this, it looks like they’re in good shape heading into the rest of the year.
Chart Analysis
Price Movement and Trend Shifts
Looking at the 1-year chart for ENSG, the stock had a strong rally through the summer and into early fall, peaking above $155 before momentum shifted. That rise was supported by a smooth climb in the 50-day moving average, which stayed above the 200-day line for much of the year. But that setup flipped in early March. The 50-day average has since trended downward and now sits just below the 200-day, a formation known as a death cross, which can sometimes reflect a change in longer-term sentiment.
Since February, price action has been choppier with lower highs and lower lows. The price recently bounced off its low near $120, attempting to reclaim the 50-day moving average, but hasn’t broken through decisively yet. The overall structure has shifted from a clean uptrend to a consolidation range with downside pressure.
Volume and RSI Behavior
Volume has mostly been quiet with a few notable spikes, particularly one in October that likely reflects earnings or other fundamental news. The rest of the volume profile suggests no major institutional accumulation or selloff in recent months, but rather a wait-and-see approach.
The RSI tells an interesting story. It spent most of the rally last year in the 60–75 range, consistent with a strong trend. Since the start of this year, though, RSI has dipped into oversold territory multiple times and recently bounced off the 30 mark. It’s now hovering just below the midpoint, suggesting the stock isn’t currently overbought or oversold but hasn’t regained upward strength either.
Takeaway from the Recent Candles
Zooming into the last five candles, there’s a mix of indecision and cautious buying. Wicks on both sides show some tug-of-war between buyers and sellers. The latest candles show an attempt to hold support near $125, but momentum isn’t convincing yet. Unless there’s a clean break above the 50-day average and some follow-through with volume, the trend remains uncertain.
This chart reflects a name that had a strong run, pulled back with the broader market shift, and is now testing a base. Price is trying to stabilize, but hasn’t yet signaled a confirmed reversal.
Management Team
Ensign Group’s leadership continues to be a standout feature, especially in an industry where operational missteps can be costly. Barry Port, who took over as CEO in 2019, has been with the company for many years and understands the business from the inside out. He comes from an operational background, and that focus is reflected in how the company runs today. The strategy centers around decentralization, putting decision-making power into the hands of local facility leaders rather than trying to manage everything from the top down.
That approach isn’t just theoretical—it’s proven to be effective. CFO Suzanne Snapper has played a key role in balancing Ensign’s growth ambitions with a strong financial foundation. The team around them is stable, experienced, and largely made up of long-tenured leaders who’ve been promoted internally. That continuity matters. It builds trust, and it means decisions are informed by firsthand experience. Ensign doesn’t try to grab attention with flashy projections or bold headlines. The leadership simply focuses on operating efficiently, maintaining strong margins, and growing in ways that make sense for the long term.
Valuation and Stock Performance
The valuation picture for Ensign is grounded in reality. With a trailing price-to-earnings ratio around 24 and a forward estimate a little over 20, the stock is priced reasonably for a company with this level of consistent earnings growth. It’s not cheap, but it’s far from overvalued. When you compare it to others in the healthcare services space, Ensign falls in that middle ground—a fair value for a business with dependable performance.
The PEG ratio at 1.37 suggests that the valuation is in line with expected earnings growth over the next five years. The EV/EBITDA ratio is close to 18, which supports the idea that this is a high-quality operator commanding a modest premium, but nothing excessive. These figures reflect a company that is viewed as a steady performer in a defensive sector, and the market seems to be pricing that in appropriately.
Over the past year, the stock has had its moments. After climbing to a high above $155, shares have pulled back and now trade closer to the low $130s. Some of that is tied to broader market trends, but it also offers a more reasonable entry point compared to where it was trading at the peak. From a long-term perspective, the performance remains strong. The upward trend in revenue, net income, and free cash flow provides real support beneath the share price.
While recent price action shows some technical weakness, the fundamentals haven’t wavered. For long-term investors, that makes a temporary dip look less like a problem and more like a chance to enter or build a position at a better valuation.
Risks and Considerations
Ensign, like any company in healthcare, faces a few external risks that are worth watching. The most prominent is its reliance on Medicare and Medicaid reimbursements. Any major change in government policy or funding could put pressure on the company’s revenue. While Ensign has shown it can adapt, especially with its local leadership model, these policy shifts can be unpredictable and often come with little warning.
Labor costs are another issue that continues to challenge the sector. Staffing shortages and rising wages have pushed up operating expenses across many healthcare providers. Ensign has managed this well so far, but it remains a key input cost that could become more of a headwind if the current inflationary environment persists or worsens.
Acquisition activity, while generally a positive driver for Ensign, also brings complexity. Integrating new facilities always carries some level of operational and financial risk. Although Ensign has a strong history of successful integrations, any misstep could impact results in the near term. These risks are manageable, but they are real.
Another thing to note is the dividend. It’s symbolic more than anything else at this point. With a yield under 0.2%, it’s not a meaningful source of income for shareholders today. That said, the extremely low payout ratio gives plenty of flexibility to grow it over time if management decides to. For now, the dividend reflects financial strength and discipline, rather than a focus on income return.
Final Thoughts
Ensign Group offers something rare in healthcare—a clear, repeatable model that has proven to work through different market conditions. The leadership team is experienced, focused, and grounded in operational reality. Their decentralized approach isn’t just efficient, it’s durable. It allows the company to scale without sacrificing local-level quality, and that’s a big reason why results have stayed consistent.
Valuation is reasonable, reflecting both the company’s strengths and the broader market environment. The stock isn’t trying to be something it’s not. It trades based on strong earnings, steady cash flow, and a reliable growth path. The pullback from recent highs doesn’t change that fundamental picture. If anything, it may provide a better entry point for those looking for quality exposure to the healthcare space.
There are risks, but most of them are external—government policy, labor costs, or integration challenges from acquisitions. Internally, Ensign appears solid. It’s run by people who know the business and who aren’t chasing short-term gains at the expense of long-term value.
All in, Ensign continues to show what can be done when leadership, financial strength, and strategy align. It’s not flashy, but it’s steady. And in a space where consistency can be hard to find, that can make all the difference.