ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EHC - US29261A1007 - Common Stock
107 USD
+0.15 (+0.14%)
107 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 has an excellent profitability rating, 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.
EHC had a positive operating cash flow in the past year.
In the past 5 years EHC has always been profitable.
EHC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
EHC has a Return On Assets of 7.85%. This is amongst the best in the industry. EHC outperforms 91.00% of its industry peers.
The Return On Equity of EHC (22.71%) is better than 89.00% of its industry peers.
The Return On Invested Capital of EHC (12.98%) is better than 89.00% of its industry peers.
EHC had an Average Return On Invested Capital over the past 3 years of 10.83%. This is in line with the industry average of 9.44%.
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
EHC has a better Profit Margin (9.30%) than 92.00% of its industry peers.
EHC's Profit Margin has improved in the last couple of years.
EHC's Operating Margin of 17.29% is amongst the best of the industry. EHC outperforms 94.00% of its industry peers.
EHC's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 95.65%, 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 | 17.29% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EHC is creating some value.
EHC has more shares outstanding than it did 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 3.02 indicates that EHC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.02, EHC is doing good in the industry, outperforming 62.00% 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 61.00% 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.
The Debt to Equity ratio of EHC (1.01) is worse than 61.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 3.02 |
ROIC/WACC1.5
WACC8.63%
2.3 Liquidity
A Current Ratio of 1.14 indicates that EHC should not have too much problems paying its short term obligations.
EHC has a worse Current ratio (1.14) than 61.00% 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.
EHC has a Quick ratio (1.14) which is in line with its industry peers.
| 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
The Earnings Per Share is expected to grow by 12.24% on average over the next years. This is quite good.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
EHC is valuated rather expensively with a Price/Earnings ratio of 20.70.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 69.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of EHC to the average of the S&P500 Index (26.54), we can say EHC is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 18.23, the valuation of EHC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, EHC is valued a bit cheaper than the industry average as 65.00% of the companies are valued more expensively.
EHC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.7 | ||
| Fwd PE | 18.23 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 74.00% of the companies listed in the same industry.
EHC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.74 | ||
| EV/EBITDA | 9.89 |
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.
The excellent profitability rating of EHC may justify a higher PE ratio.
EHC's earnings are expected to grow with 12.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.99
PEG (5Y)8.02
EPS Next 2Y15.1%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
EHC has a yearly dividend return of 0.71%, which is pretty low.
EHC's Dividend Yield is rather good when compared to the industry average which is at 0.67. EHC pays more dividend than 83.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.96, 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.
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%
107
+0.15 (+0.14%)
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 Cap10.77B
Revenue(TTM)5.80B
Net Income(TTM)539.10M
Analysts87.06
Price Target143.14 (33.78%)
Short Float %2.67%
Short Ratio3.6
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)3.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.2%
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 | 20.7 | ||
| Fwd PE | 18.23 | ||
| P/S | 1.86 | ||
| P/FCF | 26.74 | ||
| P/OCF | 9.71 | ||
| P/B | 4.54 | ||
| P/tB | 13.82 | ||
| EV/EBITDA | 9.89 |
EPS(TTM)5.17
EY4.83%
EPS(NY)5.87
Fwd EY5.48%
FCF(TTM)4
FCFY3.74%
OCF(TTM)11.02
OCFY10.3%
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 | 3.02 |
F-Score9
WACC8.63%
ROIC/WACC1.5
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%.