ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - NYSE:EHC - US29261A1007 - Common Stock
124.55 USD
+1.55 (+1.26%)
124.55 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to EHC. EHC was compared to 100 industry peers in the Health Care Providers & Services industry. EHC scores excellent on profitability, but 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.
In the past 5 years EHC has always been profitable.
In the past 5 years EHC always reported a positive cash flow from operatings.
1.2 Ratios
EHC has a Return On Assets of 7.67%. This is amongst the best in the industry. EHC outperforms 90.00% of its industry peers.
EHC has a Return On Equity of 22.82%. This is amongst the best in the industry. EHC outperforms 89.00% of its industry peers.
With an excellent Return On Invested Capital value of 12.93%, EHC belongs to the best of the industry, outperforming 89.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EHC is in line with the industry average of 9.33%.
The last Return On Invested Capital (12.93%) for EHC is above the 3 year average (10.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.67% | ||
| ROE | 22.82% | ||
| ROIC | 12.93% |
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
Looking at the Profit Margin, with a value of 9.18%, EHC belongs to the top of the industry, outperforming 91.00% of the companies in the same industry.
EHC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.07%, EHC belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
With an excellent Gross Margin value of 95.62%, EHC belongs to the best of the industry, outperforming 99.00% 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 | 17.07% | ||
| PM (TTM) | 9.18% | ||
| GM | 95.62% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EHC is still creating some value.
Compared to 1 year ago, EHC has more shares outstanding
Compared to 5 years ago, EHC has more shares outstanding
EHC has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.18 indicates that EHC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.18, EHC is in the better half of the industry, outperforming 62.00% of the companies in the same industry.
The Debt to FCF ratio of EHC is 5.60, which is a neutral value as it means it would take EHC, 5.60 years of fcf income to pay off all of its debts.
EHC has a Debt to FCF ratio of 5.60. This is in the better half of the industry: EHC outperforms 65.00% of its industry peers.
A Debt/Equity ratio of 1.02 is on the high side and indicates that EHC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.02, EHC is doing worse than 63.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 3.18 |
ROIC/WACC1.52
WACC8.53%
2.3 Liquidity
EHC has a Current Ratio of 1.06. This is a normal value and indicates that EHC is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.06, EHC is not doing good in the industry: 71.00% of the companies in the same industry are doing better.
A Quick Ratio of 1.06 indicates that EHC should not have too much problems paying its short term obligations.
The Quick ratio of EHC (1.06) is worse than 67.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
EHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.02%, which is quite impressive.
EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.58% yearly.
The Revenue has grown by 11.80% 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)23.02%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%26.13%
Revenue 1Y (TTM)11.8%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%12.03%
3.2 Future
Based on estimates for the next years, EHC will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.83% on average per year.
Based on estimates for the next years, EHC will show a quite strong growth in Revenue. The Revenue will grow by 8.37% on average per year.
EPS Next Y20.36%
EPS Next 2Y14.99%
EPS Next 3Y13.07%
EPS Next 5Y11.83%
Revenue Next Year10.96%
Revenue Next 2Y9.87%
Revenue Next 3Y9.27%
Revenue Next 5Y8.37%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.06 indicates a quite expensive valuation of EHC.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 63.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of EHC to the average of the S&P500 Index (27.40), we can say EHC is valued inline with the index average.
EHC is valuated rather expensively with a Price/Forward Earnings ratio of 21.26.
The rest of the industry has a similar Price/Forward Earnings ratio as EHC.
The average S&P500 Price/Forward Earnings ratio is at 22.94. EHC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.06 | ||
| Fwd PE | 21.26 |
4.2 Price Multiples
65.00% of the companies in the same industry are more expensive than EHC, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EHC is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.56 | ||
| EV/EBITDA | 11.5 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EHC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as EHC's earnings are expected to grow with 13.07% in the coming years.
PEG (NY)1.23
PEG (5Y)9.71
EPS Next 2Y14.99%
EPS Next 3Y13.07%
5. Dividend
5.1 Amount
EHC has a yearly dividend return of 0.62%, which is pretty low.
Compared to an average industry Dividend Yield of 2.44, EHC pays a better dividend. On top of this EHC pays more dividend than 81.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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.
The dividend of EHC decreased recently.
Dividend Growth(5Y)-10.71%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
12.89% of the earnings are spent on dividend by EHC. This is a low number and sustainable payout ratio.
DP12.89%
EPS Next 2Y14.99%
EPS Next 3Y13.07%
124.55
+1.55 (+1.26%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.92%
Inst Owner Change-0.02%
Ins Owners1.24%
Ins Owner Change0.56%
Market Cap12.54B
Analysts87.06
Price Target140.17 (12.54%)
Short Float %1.48%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
Yearly Dividend0.62
Dividend Growth(5Y)-10.71%
DP12.89%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.38%
Min EPS beat(2)14.11%
Max EPS beat(2)14.64%
EPS beat(4)4
Avg EPS beat(4)12.46%
Min EPS beat(4)8.15%
Max EPS beat(4)14.64%
EPS beat(8)8
Avg EPS beat(8)12.84%
EPS beat(12)12
Avg EPS beat(12)13.47%
EPS beat(16)13
Avg EPS beat(16)9.09%
Revenue beat(2)2
Avg Revenue beat(2)0.97%
Min Revenue beat(2)0.79%
Max Revenue beat(2)1.16%
Revenue beat(4)4
Avg Revenue beat(4)0.85%
Min Revenue beat(4)0.72%
Max Revenue beat(4)1.16%
Revenue beat(8)6
Avg Revenue beat(8)0.55%
Revenue beat(12)10
Avg Revenue beat(12)0.65%
Revenue beat(16)10
Avg Revenue beat(16)-4.97%
PT rev (1m)1.23%
PT rev (3m)4.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.85%
EPS NY rev (1m)0.89%
EPS NY rev (3m)5.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.06 | ||
| Fwd PE | 21.26 | ||
| P/S | 2.21 | ||
| P/FCF | 28.56 | ||
| P/OCF | 11.35 | ||
| P/B | 5.5 | ||
| P/tB | 18.42 | ||
| EV/EBITDA | 11.5 |
EPS(TTM)4.97
EY3.99%
EPS(NY)5.86
Fwd EY4.7%
FCF(TTM)4.36
FCFY3.5%
OCF(TTM)10.98
OCFY8.81%
SpS56.29
BVpS22.64
TBVpS6.76
PEG (NY)1.23
PEG (5Y)9.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.67% | ||
| ROE | 22.82% | ||
| ROCE | 16.34% | ||
| ROIC | 12.93% | ||
| ROICexc | 13.15% | ||
| ROICexgc | 18.12% | ||
| OM | 17.07% | ||
| PM (TTM) | 9.18% | ||
| GM | 95.62% | ||
| FCFM | 7.75% |
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%
ROICexcg growth 3Y1.55%
ROICexcg 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-Score8
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 5.6 | ||
| Debt/EBITDA | 1.81 | ||
| Cap/Depr | 211.16% | ||
| Cap/Sales | 11.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.16% | ||
| Profit Quality | 84.4% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | 3.18 |
F-Score8
WACC8.53%
ROIC/WACC1.52
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)23.02%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%26.13%
EPS Next Y20.36%
EPS Next 2Y14.99%
EPS Next 3Y13.07%
EPS Next 5Y11.83%
Revenue 1Y (TTM)11.8%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%12.03%
Revenue Next Year10.96%
Revenue Next 2Y9.87%
Revenue Next 3Y9.27%
Revenue Next 5Y8.37%
EBIT growth 1Y22.1%
EBIT growth 3Y9.45%
EBIT growth 5Y4.54%
EBIT Next Year51.87%
EBIT Next 3Y21.54%
EBIT Next 5YN/A
FCF growth 1Y285.6%
FCF growth 3Y29.84%
FCF growth 5Y9.28%
OCF growth 1Y63.3%
OCF growth 3Y11.89%
OCF growth 5Y9.56%