ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EHC - US29261A1007 - Common Stock
99.37 USD
-0.04 (-0.04%)
99.37 USD
0 (0%)
Taking everything into account, EHC scores 6 out of 10 in our fundamental rating. EHC was compared to 102 industry peers in the Health Care Providers & Services industry. While EHC has a great profitability rating, there are some minor concerns on its financial health. EHC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year EHC was profitable.
- EHC had a positive operating cash flow in the past year.
- EHC had positive earnings in each of the past 5 years.
- EHC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- EHC has a better Return On Assets (7.85%) than 91.18% of its industry peers.
- EHC's Return On Equity of 22.71% is amongst the best of the industry. EHC outperforms 90.20% of its industry peers.
- With an excellent Return On Invested Capital value of 12.98%, EHC belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for EHC is in line with the industry average of 9.21%.
- 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
- Looking at the Profit Margin, with a value of 9.30%, EHC belongs to the top of the industry, outperforming 93.14% of the companies in the same industry.
- In the last couple of years the Profit Margin of EHC has grown nicely.
- Looking at the Operating Margin, with a value of 17.29%, EHC belongs to the top of the industry, outperforming 95.10% of the companies in the same industry.
- EHC's Operating Margin has been stable in the last couple of years.
- EHC has a Gross Margin of 95.65%. This is amongst the best in the industry. EHC outperforms 99.02% of its industry peers.
- 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.
- The number of shares outstanding for EHC has been increased compared to 1 year ago.
- Compared to 5 years ago, EHC has more shares outstanding
- Compared to 1 year ago, EHC has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.92 indicates that EHC is not a great score, but indicates only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.92, EHC is in the better half of the industry, outperforming 62.75% of the companies in the same industry.
- The Debt to FCF ratio of EHC is 6.04, which is on the high side as it means it would take EHC, 6.04 years of fcf income to pay off 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 perfoms like the industry average, outperforming 40.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 2.92 |
ROIC/WACC1.48
WACC8.76%
2.3 Liquidity
- EHC has a Current 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.
- EHC's Current ratio of 1.14 is in line compared to the rest of the industry. EHC outperforms 40.20% of its industry peers.
- A Quick Ratio of 1.14 indicates that EHC should not have too much problems paying 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
- The Earnings Per Share has grown by an impressive 22.80% over the past year.
- EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.58% yearly.
- Looking at the last year, EHC shows a quite strong growth in Revenue. The Revenue has grown by 11.13% in the last year.
- 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
- Based on estimates for the next years, EHC will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.24% 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 8.33% on average per year.
EPS Next Y20.91%
EPS Next 2Y15.1%
EPS Next 3Y12.88%
EPS Next 5Y12.24%
Revenue Next Year10.92%
Revenue Next 2Y9.83%
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 19.22 indicates a rather expensive valuation of EHC.
- Compared to the rest of the industry, the Price/Earnings ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 73.53% of the companies listed in the same industry.
- EHC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.32.
- The Price/Forward Earnings ratio is 16.93, which indicates a correct valuation of EHC.
- 74.51% of the companies in the same industry are more expensive than EHC, based on the Price/Forward Earnings ratio.
- EHC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.22 | ||
| Fwd PE | 16.93 |
4.2 Price Multiples
- EHC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EHC is cheaper than 74.51% of the companies in the same industry.
- EHC's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.84 | ||
| EV/EBITDA | 9.32 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 12.88% in the coming years.
PEG (NY)0.92
PEG (5Y)7.45
EPS Next 2Y15.1%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
- EHC has a yearly dividend return of 0.74%, which is pretty low.
- In the last 3 months the price of EHC has falen by -21.22%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.59, 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 1.83, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
5.2 History
- The dividend of EHC decreases each year by -10.71%.
- EHC has paid a dividend for at least 10 years, which is 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
- 12.82% 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%
99.37
-0.04 (-0.04%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)10-29 2025-10-29/amc
Earnings (Next)02-05 2026-02-05/amc
Inst Owners97.62%
Inst Owner Change0.97%
Ins Owners1.23%
Ins Owner Change0.04%
Market Cap10.00B
Revenue(TTM)5.80B
Net Income(TTM)539.10M
Analysts87.5
Price Target143.14 (44.05%)
Short Float %3.51%
Short Ratio3.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
Yearly Dividend0.62
Dividend Growth(5Y)-10.71%
DP12.82%
Div Incr Years1
Div Non Decr Years1
Ex-Date01-02 2026-01-02 (0.19)
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%
PT rev (3m)2.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.4%
EPS NY rev (1m)0.07%
EPS NY rev (3m)0.45%
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 | 19.22 | ||
| Fwd PE | 16.93 | ||
| P/S | 1.73 | ||
| P/FCF | 24.84 | ||
| P/OCF | 9.02 | ||
| P/B | 4.21 | ||
| P/tB | 12.84 | ||
| EV/EBITDA | 9.32 |
EPS(TTM)5.17
EY5.2%
EPS(NY)5.87
Fwd EY5.91%
FCF(TTM)4
FCFY4.03%
OCF(TTM)11.02
OCFY11.09%
SpS57.6
BVpS23.59
TBVpS7.74
PEG (NY)0.92
PEG (5Y)7.45
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 | 2.92 |
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 Y20.91%
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 2Y9.83%
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.
What is the valuation status for EHC stock?
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 financial health of ENCOMPASS HEALTH CORP (EHC) stock?
The financial health rating of ENCOMPASS HEALTH CORP (EHC) is 4 / 10.
Is the dividend of ENCOMPASS HEALTH CORP sustainable?
The dividend rating of ENCOMPASS HEALTH CORP (EHC) is 4 / 10 and the dividend payout ratio is 12.82%.