Select Medical Holdings Corporation (SEM): Should Investors Buy This Specialty Hospital Operator Now?

Kindred Healthcare, Inc. (NYSE:KND) is the cheapest of the trio. At $12.80 per share, Kindred Healthcare is worth around $690.6 million. It is valued at only 5.32 times its trailing EBITDA. Kindred Healthcare operates around 2,169 healthcare service locations including transitional care hospitals, inpatient rehabilitation hospitals, and nursing centers. The company has been going through strategic repositioning via the divestment of 17 non-strategic facilities worth around $187 million. The expected proceeds of $180 million will be reinvested in Integrate Care Markets and the Home Health and Hospice business. Moreover, it also plans to exit 54 nursing facilities leased from its biggest landlord, Ventas. The exit from 19 Ventas facilities has helped lift its first quarter 2013 EPS by $0.05 per share. For the full year 2013, Kindred Healthcare expects to generate around $5.9 billion in revenue, with EPS staying in the range of $1.10-$1.30. The operating cash flows were estimated to come in at $230 million-$250 million.

My Foolish take

The aspect in which Select Medical Holdings Corporation (NYSE:SEM) is more outstanding that its peers is its dividend payment. It had paid a special dividend of $1.50 per share to its shareholders at the end of 2012. In May, shareholders received an additional cash dividend payment of $0.10 per share. Thus, the forward dividend yield is quite juicy at 5%. Personally, I also like Kindred Healthcare due to its low valuation and divestment plan of non-strategic facilities.

The article Should Investors Buy This Specialty Hospital Operator Now? originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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