ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EHC - US29261A1007 - Common Stock
107.09 USD
+0.7 (+0.66%)
107.09 USD
0 (0%)
EHC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 102 industry peers in the Health Care Providers & Services industry. While EHC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. EHC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
EHC had positive earnings in the past year.
In the past year EHC had a positive cash flow from operations.
Each year in the past 5 years EHC has been profitable.
Each year in the past 5 years EHC had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.85%, EHC belongs to the best of the industry, outperforming 90.20% of the companies in the same industry.
The Return On Equity of EHC (22.71%) is better than 89.22% of its industry peers.
The Return On Invested Capital of EHC (12.98%) is better than 88.24% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EHC is in line with the industry average of 9.61%.
The 3 year average ROIC (10.83%) for EHC is below the current ROIC(12.98%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 22.71% | ||
| ROIC | 12.98% |
ROA(3y)5.82%
ROA(5y)5.56%
ROE(3y)21.24%
ROE(5y)20.61%
ROIC(3y)10.83%
ROIC(5y)9.67%
1.3 Margins
With an excellent Profit Margin value of 9.30%, EHC belongs to the best of the industry, outperforming 92.16% of the companies in the same industry.
In the last couple of years the Profit Margin of EHC has grown nicely.
EHC has a Operating Margin of 17.29%. This is amongst the best in the industry. EHC outperforms 94.12% of its industry peers.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
Looking at the Gross Margin, with a value of 95.65%, EHC belongs to the top of the industry, outperforming 99.02% of the companies in the same industry.
EHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.29% | ||
| PM (TTM) | 9.3% | ||
| GM | 95.65% |
OM growth 3Y-0.68%
OM growth 5Y1.36%
PM growth 3Y-6.23%
PM growth 5Y1.66%
GM growth 3Y0.05%
GM growth 5Y-0.17%
2. Health
2.1 Basic Checks
EHC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, EHC has more shares outstanding
The number of shares outstanding for EHC has been increased compared to 5 years ago.
Compared to 1 year ago, EHC has an improved debt to assets ratio.
2.2 Solvency
EHC has an Altman-Z score of 3.01. This indicates that EHC is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.01, EHC is in the better half of the industry, outperforming 62.75% of the companies in the same industry.
EHC has a debt to FCF ratio of 6.04. This is a slightly negative value and a sign of low solvency as EHC would need 6.04 years to pay back of all of its debts.
The Debt to FCF ratio of EHC (6.04) is better than 60.78% of its industry peers.
EHC has a Debt/Equity ratio of 1.01. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.01, EHC is not doing good in the industry: 61.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 3.01 |
ROIC/WACC1.48
WACC8.76%
2.3 Liquidity
A Current Ratio of 1.14 indicates that EHC should not have too much problems paying its short term obligations.
EHC's Current ratio of 1.14 is on the low side compared to the rest of the industry. EHC is outperformed by 61.76% of its industry peers.
EHC has a Quick Ratio of 1.14. This is a normal value and indicates that EHC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of EHC (1.14) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
EHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.80%, which is quite impressive.
Measured over the past 5 years, EHC shows a small growth in Earnings Per Share. The EPS has been growing by 2.58% on average per year.
The Revenue has grown by 11.13% in the past year. This is quite good.
EHC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.13% yearly.
EPS 1Y (TTM)22.8%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%19.42%
Revenue 1Y (TTM)11.13%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%9.36%
3.2 Future
EHC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.24% yearly.
Based on estimates for the next years, EHC will show a quite strong growth in Revenue. The Revenue will grow by 8.33% on average per year.
EPS Next Y20.82%
EPS Next 2Y15.1%
EPS Next 3Y12.88%
EPS Next 5Y12.24%
Revenue Next Year10.92%
Revenue Next 2Y9.84%
Revenue Next 3Y9.27%
Revenue Next 5Y8.33%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.71 indicates a rather expensive valuation of EHC.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 70.59% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.61. EHC is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 18.25, which indicates a rather expensive current valuation of EHC.
Based on the Price/Forward Earnings ratio, EHC is valued a bit cheaper than 67.65% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.01, EHC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.71 | ||
| Fwd PE | 18.25 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than the industry average as 74.51% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as EHC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.76 | ||
| EV/EBITDA | 9.85 |
4.3 Compensation for Growth
EHC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of EHC may justify a higher PE ratio.
A more expensive valuation may be justified as EHC's earnings are expected to grow with 12.88% in the coming years.
PEG (NY)0.99
PEG (5Y)8.02
EPS Next 2Y15.1%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
With a yearly dividend of 0.71%, EHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 0.58, EHC pays a better dividend. On top of this EHC pays more dividend than 84.31% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
The dividend of EHC decreases each year by -10.71%.
EHC has been paying a dividend for at least 10 years, so it has a reliable track record.
EHC has decreased its dividend recently.
Dividend Growth(5Y)-10.71%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
12.82% of the earnings are spent on dividend by EHC. This is a low number and sustainable payout ratio.
DP12.82%
EPS Next 2Y15.1%
EPS Next 3Y12.88%
107.09
+0.7 (+0.66%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners97.58%
Inst Owner Change1.4%
Ins Owners1.23%
Ins Owner Change-0.01%
Market Cap10.78B
Revenue(TTM)5.80B
Net Income(TTM)539.10M
Analysts87.06
Price Target143.14 (33.66%)
Short Float %2.58%
Short Ratio3.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend0.62
Dividend Growth(5Y)-10.71%
DP12.82%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.29%
Min EPS beat(2)1.94%
Max EPS beat(2)14.64%
EPS beat(4)4
Avg EPS beat(4)10.91%
Min EPS beat(4)1.94%
Max EPS beat(4)14.64%
EPS beat(8)8
Avg EPS beat(8)11.75%
EPS beat(12)12
Avg EPS beat(12)13.3%
EPS beat(16)14
Avg EPS beat(16)9.44%
Revenue beat(2)1
Avg Revenue beat(2)-0.01%
Min Revenue beat(2)-1.17%
Max Revenue beat(2)1.16%
Revenue beat(4)3
Avg Revenue beat(4)0.37%
Min Revenue beat(4)-1.17%
Max Revenue beat(4)1.16%
Revenue beat(8)5
Avg Revenue beat(8)0.39%
Revenue beat(12)9
Avg Revenue beat(12)0.44%
Revenue beat(16)10
Avg Revenue beat(16)-3.55%
PT rev (1m)0.9%
PT rev (3m)2.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.4%
EPS NY rev (1m)0.05%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.71 | ||
| Fwd PE | 18.25 | ||
| P/S | 1.86 | ||
| P/FCF | 26.76 | ||
| P/OCF | 9.72 | ||
| P/B | 4.54 | ||
| P/tB | 13.83 | ||
| EV/EBITDA | 9.85 |
EPS(TTM)5.17
EY4.83%
EPS(NY)5.87
Fwd EY5.48%
FCF(TTM)4
FCFY3.74%
OCF(TTM)11.02
OCFY10.29%
SpS57.6
BVpS23.59
TBVpS7.74
PEG (NY)0.99
PEG (5Y)8.02
Graham Number52.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 22.71% | ||
| ROCE | 16.42% | ||
| ROIC | 12.98% | ||
| ROICexc | 13.16% | ||
| ROICexgc | 17.91% | ||
| OM | 17.29% | ||
| PM (TTM) | 9.3% | ||
| GM | 95.65% | ||
| FCFM | 6.95% |
ROA(3y)5.82%
ROA(5y)5.56%
ROE(3y)21.24%
ROE(5y)20.61%
ROIC(3y)10.83%
ROIC(5y)9.67%
ROICexc(3y)10.95%
ROICexc(5y)9.82%
ROICexgc(3y)15.47%
ROICexgc(5y)15.57%
ROCE(3y)13.69%
ROCE(5y)12.22%
ROICexgc growth 3Y1.55%
ROICexgc growth 5Y-5.09%
ROICexc growth 3Y12.32%
ROICexc growth 5Y3.22%
OM growth 3Y-0.68%
OM growth 5Y1.36%
PM growth 3Y-6.23%
PM growth 5Y1.66%
GM growth 3Y0.05%
GM growth 5Y-0.17%
F-Score9
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Debt/EBITDA | 1.81 | ||
| Cap/Depr | 220.91% | ||
| Cap/Sales | 12.18% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.87% | ||
| Profit Quality | 74.68% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 3.01 |
F-Score9
WACC8.76%
ROIC/WACC1.48
Cap/Depr(3y)222.37%
Cap/Depr(5y)209.98%
Cap/Sales(3y)12.51%
Cap/Sales(5y)12.54%
Profit Quality(3y)67.08%
Profit Quality(5y)69.21%
High Growth Momentum
Growth
EPS 1Y (TTM)22.8%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%19.42%
EPS Next Y20.82%
EPS Next 2Y15.1%
EPS Next 3Y12.88%
EPS Next 5Y12.24%
Revenue 1Y (TTM)11.13%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%9.36%
Revenue Next Year10.92%
Revenue Next 2Y9.84%
Revenue Next 3Y9.27%
Revenue Next 5Y8.33%
EBIT growth 1Y21.88%
EBIT growth 3Y9.45%
EBIT growth 5Y4.54%
EBIT Next Year52.35%
EBIT Next 3Y21.51%
EBIT Next 5YN/A
FCF growth 1Y54.97%
FCF growth 3Y29.84%
FCF growth 5Y9.28%
OCF growth 1Y34.84%
OCF growth 3Y11.89%
OCF growth 5Y9.56%
ENCOMPASS HEALTH CORP / EHC FAQ
What is the fundamental rating for EHC stock?
ChartMill assigns a fundamental rating of 6 / 10 to EHC.
Can you provide the valuation status for ENCOMPASS HEALTH CORP?
ChartMill assigns a valuation rating of 5 / 10 to ENCOMPASS HEALTH CORP (EHC). This can be considered as Fairly Valued.
Can you provide the profitability details for ENCOMPASS HEALTH CORP?
ENCOMPASS HEALTH CORP (EHC) has a profitability rating of 9 / 10.
What is the earnings growth outlook for ENCOMPASS HEALTH CORP?
The Earnings per Share (EPS) of ENCOMPASS HEALTH CORP (EHC) is expected to grow by 20.82% in the next year.
How sustainable is the dividend of ENCOMPASS HEALTH CORP (EHC) stock?
The dividend rating of ENCOMPASS HEALTH CORP (EHC) is 4 / 10 and the dividend payout ratio is 12.82%.