ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
NYSE:EHC - New York Stock Exchange, Inc. - US29261A1007 - Common Stock
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. EHC scores excellent on profitability, but 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.
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
The Return On Assets of EHC (6.50%) is better than 89.72% of its industry peers.
EHC's Return On Equity of 21.41% is amongst the best of the industry. EHC outperforms 91.59% of its industry peers.
EHC has a better Return On Invested Capital (11.53%) than 90.65% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EHC is in line with the industry average of 8.27%.
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
Looking at the Profit Margin, with a value of 8.04%, EHC belongs to the top of the industry, outperforming 87.85% of the companies in the same industry.
In the last couple of years the Profit Margin of EHC has remained more or less at the same level.
EHC has a Operating Margin of 15.76%. This is amongst the best in the industry. EHC outperforms 93.46% of its industry peers.
EHC's Operating Margin has been stable in the last couple of years.
The Gross Margin of EHC (95.49%) is better than 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EHC is still creating some value.
The number of shares outstanding for EHC has been increased compared to 1 year ago.
EHC has more shares outstanding than it did 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 2.66. 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 (2.66) is comparable to the rest of the industry.
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 has a better Debt to FCF ratio (9.97) than 60.75% 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.
EHC has a worse Debt to Equity ratio (1.20) than 68.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 9.97 | ||
| Altman-Z | 2.66 |
ROIC/WACC1.42
WACC8.13%
2.3 Liquidity
EHC has a Current 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.
Looking at the Current ratio, with a value of 1.04, EHC is doing worse than 76.64% of the companies in the same industry.
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.
The Quick ratio of EHC (1.04) is worse than 68.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.93% over the past year.
EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.06% yearly.
EHC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.15%.
The Revenue has been growing slightly by 2.34% on average over the past years.
EPS 1Y (TTM)17.93%
EPS 3Y7.99%
EPS 5Y0.06%
EPS Q2Q%19.77%
Revenue 1Y (TTM)11.15%
Revenue growth 3Y10.42%
Revenue growth 5Y2.34%
Sales Q2Q%11.94%
3.2 Future
The Earnings Per Share is expected to grow by 9.10% 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 9.79% on average per year.
EPS Next Y18.91%
EPS Next 2Y15.08%
EPS Next 3Y13.72%
EPS Next 5Y9.1%
Revenue Next Year11.66%
Revenue Next 2Y10.38%
Revenue Next 3Y9.79%
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 22.75, EHC is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 68.22% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, EHC is valued at the same level.
A Price/Forward Earnings ratio of 19.87 indicates a rather expensive valuation of EHC.
EHC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EHC is cheaper than 66.36% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of EHC to the average of the S&P500 Index (24.44), we can say EHC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.75 | ||
| Fwd PE | 19.87 |
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.
64.49% of the companies in the same industry are more expensive than EHC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.32 | ||
| EV/EBITDA | 10.75 |
4.3 Compensation for Growth
EHC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of EHC may justify a higher PE ratio.
EHC's earnings are expected to grow with 13.72% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.2
PEG (5Y)413.42
EPS Next 2Y15.08%
EPS Next 3Y13.72%
5. Dividend
5.1 Amount
With a yearly dividend of 0.72%, EHC is not a good candidate for dividend investing.
EHC's Dividend Yield is rather good when compared to the industry average which is at 2.87. EHC pays more dividend than 80.37% of the companies in the same industry.
With a Dividend Yield of 0.72, EHC pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
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
14.47% of the earnings are spent on dividend by EHC. This is a low number and sustainable payout ratio.
DP14.47%
EPS Next 2Y15.08%
EPS Next 3Y13.72%
ENCOMPASS HEALTH CORP
NYSE:EHC (1/21/2025, 6:40:00 PM)
After market: 95.79 0 (0%)95.79
+1.05 (+1.11%)
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 Change-0.04%
Ins Owners1.27%
Ins Owner Change-6.32%
Market Cap9.65B
Analysts87.06
Price Target118.83 (24.05%)
Short Float %1.36%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
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)0.72%
PT rev (3m)15.45%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.01%
EPS NY rev (1m)0%
EPS NY rev (3m)2.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.53%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.75 | ||
| Fwd PE | 19.87 | ||
| P/S | 1.85 | ||
| P/FCF | 37.32 | ||
| P/OCF | 10.43 | ||
| P/B | 4.92 | ||
| P/tB | 25.42 | ||
| EV/EBITDA | 10.75 |
EPS(TTM)4.21
EY4.4%
EPS(NY)4.82
Fwd EY5.03%
FCF(TTM)2.57
FCFY2.68%
OCF(TTM)9.18
OCFY9.58%
SpS51.76
BVpS19.45
TBVpS3.77
PEG (NY)1.2
PEG (5Y)413.42
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 | 2.66 |
F-Score7
WACC8.13%
ROIC/WACC1.42
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)17.93%
EPS 3Y7.99%
EPS 5Y0.06%
EPS Q2Q%19.77%
EPS Next Y18.91%
EPS Next 2Y15.08%
EPS Next 3Y13.72%
EPS Next 5Y9.1%
Revenue 1Y (TTM)11.15%
Revenue growth 3Y10.42%
Revenue growth 5Y2.34%
Sales Q2Q%11.94%
Revenue Next Year11.66%
Revenue Next 2Y10.38%
Revenue Next 3Y9.79%
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%