ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - NYSE:EHC - US29261A1007 - Common Stock
123.81 USD
-0.85 (-0.68%)
123.81 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to EHC. EHC was compared to 101 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 is not valued too expensively and it also shows a decent growth rate.
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.
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 91.09% of its industry peers.
Looking at the Return On Equity, with a value of 22.82%, EHC belongs to the top of the industry, outperforming 90.10% of the companies in the same industry.
EHC's Return On Invested Capital of 12.93% is amongst the best of the industry. EHC outperforms 89.11% 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 9.19%.
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
With an excellent Profit Margin value of 9.18%, EHC belongs to the best of the industry, outperforming 92.08% 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 17.07%, EHC belongs to the top of the industry, outperforming 95.05% of the companies in the same industry.
EHC's Operating Margin has been stable in the last couple of years.
EHC's Gross Margin of 95.62% is amongst the best of the industry. EHC outperforms 99.01% 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 | 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
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 more shares outstanding than it did 1 year ago.
Compared to 5 years ago, EHC has more shares outstanding
The debt/assets ratio for EHC has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.21 indicates that EHC is not in any danger for bankruptcy at the moment.
EHC's Altman-Z score of 3.21 is fine compared to the rest of the industry. EHC outperforms 65.35% of its industry peers.
EHC has a debt to FCF ratio of 5.60. This is a neutral value as EHC would need 5.60 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 5.60, EHC is doing good in the industry, outperforming 65.35% of the companies in the same industry.
EHC has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of EHC (1.02) is worse than 62.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 3.21 |
ROIC/WACC1.52
WACC8.51%
2.3 Liquidity
A Current Ratio of 1.06 indicates that EHC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.06, EHC is doing worse than 70.30% of the companies in the same industry.
EHC has a Quick 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.
EHC has a worse Quick ratio (1.06) than 66.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.02% over the past year.
The Earnings Per Share has been growing slightly by 2.58% on average over the past years.
Looking at the last year, EHC shows a quite strong growth in Revenue. The Revenue has grown by 11.80% in the last year.
The Revenue has been growing slightly by 3.13% on average over the past years.
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
EHC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.83% yearly.
The Revenue is expected to grow by 8.37% on average over the next years. This is quite good.
EPS Next Y19.3%
EPS Next 2Y14.71%
EPS Next 3Y12.66%
EPS Next 5Y11.83%
Revenue Next Year10.96%
Revenue Next 2Y9.87%
Revenue Next 3Y9.27%
Revenue Next 5Y8.37%
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 24.91.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 63.37% of the companies in the same industry.
When comparing the Price/Earnings ratio of EHC to the average of the S&P500 Index (27.20), we can say EHC is valued inline with the index average.
The Price/Forward Earnings ratio is 21.24, which indicates a rather expensive current valuation of EHC.
The rest of the industry has a similar Price/Forward Earnings ratio as EHC.
When comparing the Price/Forward Earnings ratio of EHC to the average of the S&P500 Index (22.71), we can say EHC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.91 | ||
| Fwd PE | 21.24 |
4.2 Price Multiples
65.35% of the companies in the same industry are more expensive than EHC, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as EHC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.39 | ||
| EV/EBITDA | 11.63 |
4.3 Compensation for Growth
EHC's 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.
EHC's earnings are expected to grow with 12.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.29
PEG (5Y)9.65
EPS Next 2Y14.71%
EPS Next 3Y12.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.60%, EHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.43, EHC pays a better dividend. On top of this EHC pays more dividend than 81.19% of the companies listed in the same industry.
With a Dividend Yield of 0.60, EHC pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
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 2Y14.71%
EPS Next 3Y12.66%
123.81
-0.85 (-0.68%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners97.11%
Inst Owner Change-4.08%
Ins Owners1.24%
Ins Owner Change0.56%
Market Cap12.47B
Analysts87.06
Price Target139.74 (12.87%)
Short Float %1.3%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
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)3.01%
PT rev (3m)4.36%
EPS NQ rev (1m)1.32%
EPS NQ rev (3m)3.49%
EPS NY rev (1m)4.5%
EPS NY rev (3m)4.39%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)0.4%
Revenue NY rev (1m)0.74%
Revenue NY rev (3m)0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.91 | ||
| Fwd PE | 21.24 | ||
| P/S | 2.2 | ||
| P/FCF | 28.39 | ||
| P/OCF | 11.28 | ||
| P/B | 5.47 | ||
| P/tB | 18.31 | ||
| EV/EBITDA | 11.63 |
EPS(TTM)4.97
EY4.01%
EPS(NY)5.83
Fwd EY4.71%
FCF(TTM)4.36
FCFY3.52%
OCF(TTM)10.98
OCFY8.86%
SpS56.29
BVpS22.64
TBVpS6.76
PEG (NY)1.29
PEG (5Y)9.65
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 | 3.21 |
F-Score8
WACC8.51%
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 Y19.3%
EPS Next 2Y14.71%
EPS Next 3Y12.66%
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 Year48.71%
EBIT Next 3Y20.54%
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%