ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
NYSE:EHC - New York Stock Exchange, Inc. - US29261A1007 - Common Stock - Currency: USD
Overall EHC gets a fundamental rating of 5 out of 10. We evaluated EHC against 108 industry peers in the Health Care Providers & Services industry. While EHC belongs to the best of the industry regarding profitability, there are concerns on its financial health. EHC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year EHC was profitable.
In the past year EHC had a positive cash flow from operations.
Of the past 5 years EHC 4 years were profitable.
Of the past 5 years EHC 4 years had a positive operating cash flow.
1.2 Ratios
EHC has a better Return On Assets (6.50%) than 88.78% of its industry peers.
EHC has a better Return On Equity (21.41%) than 91.59% of its industry peers.
EHC's Return On Invested Capital of 11.53% is amongst the best of the industry. EHC outperforms 89.72% of its industry peers.
EHC had an Average Return On Invested Capital over the past 3 years of 9.54%. This is in line with the industry average of 8.14%.
The 3 year average ROIC (9.54%) for EHC is below the current ROIC(11.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 21.41% | ||
| ROIC | 11.53% |
ROA(3y)5.5%
ROA(5y)5.35%
ROE(3y)21.09%
ROE(5y)21.51%
ROIC(3y)9.54%
ROIC(5y)9.18%
1.3 Margins
With an excellent Profit Margin value of 8.04%, EHC belongs to the best of the industry, outperforming 87.85% of the companies in the same industry.
EHC's Profit Margin has been stable in the last couple of years.
The Operating Margin of EHC (15.76%) is better than 93.46% of its industry peers.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
EHC's Gross Margin of 95.49% is amongst the best of the industry. EHC outperforms 100.00% of its industry peers.
In the last couple of years the Gross Margin of EHC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.76% | ||
| PM (TTM) | 8.04% | ||
| GM | 95.49% |
OM growth 3Y0.82%
OM growth 5Y-0.89%
PM growth 3Y-2.85%
PM growth 5Y1.34%
GM growth 3Y0.09%
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.
EHC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
EHC has an Altman-Z score of 2.73. This is not the best score and indicates that EHC is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of EHC (2.73) is better than 60.75% of its industry peers.
EHC has a debt to FCF ratio of 9.97. This is a negative value and a sign of low solvency as EHC would need 9.97 years to pay back of all of its debts.
EHC's Debt to FCF ratio of 9.97 is in line compared to the rest of the industry. EHC outperforms 59.81% of its industry peers.
EHC has a Debt/Equity ratio of 1.20. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of EHC (1.20) is worse than 68.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 9.97 | ||
| Altman-Z | 2.73 |
ROIC/WACC1.38
WACC8.38%
2.3 Liquidity
A Current Ratio of 1.04 indicates that EHC should not have too much problems paying its short term obligations.
EHC has a Current ratio of 1.04. This is in the lower half of the industry: EHC underperforms 76.64% of its industry peers.
EHC has a Quick Ratio of 1.04. 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 Quick ratio of 1.04 is on the low side compared to the rest of the industry. EHC is outperformed by 67.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
EHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.70%, which is quite impressive.
The Earnings Per Share has been growing slightly by 2.58% on average over the past years.
EPS 1Y (TTM)21.7%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%23.16%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%12.69%
3.2 Future
Based on estimates for the next years, EHC will show a small growth in Earnings Per Share. The EPS will grow by 6.16% 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 8.87% on average per year.
EPS Next Y8.86%
EPS Next 2Y9.89%
EPS Next 3Y10.7%
EPS Next 5Y6.16%
Revenue Next Year9.12%
Revenue Next 2Y8.87%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS 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
The Price/Earnings ratio is 22.02, which indicates a rather expensive current valuation of EHC.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than the industry average as 67.29% of the companies are valued more expensively.
EHC is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.22 indicates a rather expensive valuation of EHC.
64.49% of the companies in the same industry are more expensive than EHC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of EHC to the average of the S&P500 Index (22.68), we can say EHC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.02 | ||
| Fwd PE | 20.22 |
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 72.90% of the companies listed in the same industry.
EHC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EHC is cheaper than 62.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38 | ||
| EV/EBITDA | 11.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
EHC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.49
PEG (5Y)8.53
EPS Next 2Y9.89%
EPS Next 3Y10.7%
5. Dividend
5.1 Amount
With a yearly dividend of 0.68%, EHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.95, EHC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
5.2 History
The dividend of EHC decreases each year by -10.00%.
EHC has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-10%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
EHC pays out 14.47% of its income as dividend. This is a sustainable payout ratio.
DP14.47%
EPS Next 2Y9.89%
EPS Next 3Y10.7%
97.53
-2.36 (-2.36%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners98.57%
Inst Owner Change0.38%
Ins Owners1.27%
Ins Owner Change-6.6%
Market Cap9.83B
Analysts87.06
Price Target119.09 (22.11%)
Short Float %1.5%
Short Ratio2.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
Yearly Dividend0.6
Dividend Growth(5Y)-10%
DP14.47%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.28%
Min EPS beat(2)8.15%
Max EPS beat(2)8.41%
EPS beat(4)4
Avg EPS beat(4)12.58%
Min EPS beat(4)8.15%
Max EPS beat(4)18.5%
EPS beat(8)8
Avg EPS beat(8)14.5%
EPS beat(12)10
Avg EPS beat(12)8.95%
EPS beat(16)13
Avg EPS beat(16)9.81%
Revenue beat(2)1
Avg Revenue beat(2)-0.26%
Min Revenue beat(2)-1.27%
Max Revenue beat(2)0.75%
Revenue beat(4)2
Avg Revenue beat(4)0.41%
Min Revenue beat(4)-1.27%
Max Revenue beat(4)2.33%
Revenue beat(8)6
Avg Revenue beat(8)0.48%
Revenue beat(12)7
Avg Revenue beat(12)-4.86%
Revenue beat(16)7
Avg Revenue beat(16)-13.42%
PT rev (1m)0.21%
PT rev (3m)10.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.3%
EPS NY rev (1m)0%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.02 | ||
| Fwd PE | 20.22 | ||
| P/S | 1.88 | ||
| P/FCF | 38 | ||
| P/OCF | 10.62 | ||
| P/B | 5.01 | ||
| P/tB | 25.89 | ||
| EV/EBITDA | 11.22 |
EPS(TTM)4.43
EY4.54%
EPS(NY)4.82
Fwd EY4.94%
FCF(TTM)2.57
FCFY2.63%
OCF(TTM)9.18
OCFY9.41%
SpS51.76
BVpS19.45
TBVpS3.77
PEG (NY)2.49
PEG (5Y)8.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 21.41% | ||
| ROCE | 14.78% | ||
| ROIC | 11.53% | ||
| ROICexc | 11.85% | ||
| ROICexgc | 16.73% | ||
| OM | 15.76% | ||
| PM (TTM) | 8.04% | ||
| GM | 95.49% | ||
| FCFM | 4.96% |
ROA(3y)5.5%
ROA(5y)5.35%
ROE(3y)21.09%
ROE(5y)21.51%
ROIC(3y)9.54%
ROIC(5y)9.18%
ROICexc(3y)9.62%
ROICexc(5y)9.33%
ROICexgc(3y)15.01%
ROICexgc(5y)16.36%
ROCE(3y)12.22%
ROCE(5y)11.77%
ROICexcg growth 3Y-0.15%
ROICexcg growth 5Y-11.88%
ROICexc growth 3Y12.2%
ROICexc growth 5Y-2.41%
OM growth 3Y0.82%
OM growth 5Y-0.89%
PM growth 3Y-2.85%
PM growth 5Y1.34%
GM growth 3Y0.09%
GM growth 5Y-0.17%
F-Score7
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 9.97 | ||
| Debt/EBITDA | 2.1 | ||
| Cap/Depr | 228.45% | ||
| Cap/Sales | 12.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.05% | ||
| Profit Quality | 61.64% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 2.73 |
F-Score7
WACC8.38%
ROIC/WACC1.38
Cap/Depr(3y)222.49%
Cap/Depr(5y)204.05%
Cap/Sales(3y)13.1%
Cap/Sales(5y)11.91%
Profit Quality(3y)53.93%
Profit Quality(5y)66.23%
High Growth Momentum
Growth
EPS 1Y (TTM)21.7%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%23.16%
EPS Next Y8.86%
EPS Next 2Y9.89%
EPS Next 3Y10.7%
EPS Next 5Y6.16%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%12.69%
Revenue Next Year9.12%
Revenue Next 2Y8.87%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y13.93%
EBIT growth 3Y11.33%
EBIT growth 5Y1.43%
EBIT Next Year51.07%
EBIT Next 3Y21.41%
EBIT Next 5YN/A
FCF growth 1Y253.76%
FCF growth 3Y-3.35%
FCF growth 5Y-11.46%
OCF growth 1Y40.71%
OCF growth 3Y6.48%
OCF growth 5Y2.22%