DaVita HealthCare Partners Inc.
) recently announced that it seeks to split its stock in a 2 for
1 ratio next month. Through this move the company intends to
adjust its share price so as to make the shares affordable to the
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Per the stock split, present DaVita shareholders will receive two
shares for every share they own. The dividend shares of the
company will be distributed on Sep 20, 2013, to shareholders of
record as on Aug 23, 2013. As of Jun 30, 2013, the number of
shares outstanding in DaVita's portfolio was 106.2 million. Post
the stock split, the number of shares will escalate to double the
quantity to approximately 212.5 million.
As of Aug 9, 2013, DaVita traded at a share price of $114.35,
that represents an approximately 5% increase year-to-date. The
stock split is expected to trim down the share price to a more
reasonable level. Lower share price will attract more investors
thereby, raising demand for DaVita's shares. We expect this to
influence a greater number of investors to consider DaVita.
Be it stock split or share repurchases or dividend payouts,
DaVita, the dialysis service provider, has always remained
upfront in taking up strategic initiatives to gain investor
confidence. The financial position of the company is also quite
robust with operating cash flow increasing at a three year CAGR
(2009-2012) of 18%. This allows the company to meet its capital
expenditure needs. This is also expected to boost investor
DaVita currently carries a Zacks Rank #3 (Hold). Other healthcare
companies that are worth considering are
Addus HomeCare Corporation
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy).