ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EHC - US29261A1007 - Common Stock
116.22 USD
-0.03 (-0.03%)
116.22 USD
0 (0%)
EHC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 101 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.
In the past year EHC had a positive cash flow from operations.
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
The Return On Assets of EHC (7.85%) is better than 91.09% of its industry peers.
EHC's Return On Equity of 22.71% is amongst the best of the industry. EHC outperforms 90.10% of its industry peers.
EHC has a Return On Invested Capital of 12.98%. This is amongst the best in the industry. EHC outperforms 90.10% 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 9.26%.
The last Return On Invested Capital (12.98%) for EHC is above the 3 year average (10.83%), which is a sign of increasing profitability.
| 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 92.08% of the companies in the same industry.
In the last couple of years the Profit Margin of EHC has grown nicely.
EHC's Operating Margin of 17.29% is amongst the best of the industry. EHC outperforms 94.06% of its industry peers.
EHC's Operating Margin has been stable in the last couple of years.
The Gross Margin of EHC (95.65%) is better than 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 | 17.29% | ||
| 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
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 3.14. This indicates that EHC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of EHC (3.14) is better than 64.36% of its industry peers.
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 60.40% of its industry peers.
A Debt/Equity ratio of 1.01 is on the high side and indicates that EHC has dependencies on debt financing.
The Debt to Equity ratio of EHC (1.01) is worse than 60.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 3.14 |
ROIC/WACC1.49
WACC8.72%
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 Current ratio (1.14) which is in line with 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
EHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.80%, which is quite impressive.
Measured over the past 5 years, EHC shows a small growth in Earnings Per Share. The EPS has been growing by 2.58% on average per year.
The Revenue has grown by 11.13% in the past year. This is quite good.
Measured over the past years, EHC shows a small growth in Revenue. The Revenue has been growing by 3.13% on average per year.
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.
The Revenue is expected to grow by 8.33% on average over the next years. This is quite good.
EPS Next Y20.76%
EPS Next 2Y15.03%
EPS Next 3Y12.88%
EPS Next 5Y12.24%
Revenue Next Year10.92%
Revenue Next 2Y9.85%
Revenue Next 3Y9.28%
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
The Price/Earnings ratio is 22.48, which indicates a rather expensive current 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 65.35% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.31, EHC is valued at the same level.
A Price/Forward Earnings ratio of 19.83 indicates a rather expensive valuation of EHC.
61.39% of the companies in the same industry are more expensive than EHC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 36.59. EHC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.48 | ||
| Fwd PE | 19.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than 69.31% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EHC is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.05 | ||
| EV/EBITDA | 10.6 |
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.
A more expensive valuation may be justified as EHC's earnings are expected to grow with 12.88% in the coming years.
PEG (NY)1.08
PEG (5Y)8.71
EPS Next 2Y15.03%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
EHC has a yearly dividend return of 0.65%, which is pretty low.
EHC's Dividend Yield is rather good when compared to the industry average which is at 2.48. EHC pays more dividend than 83.17% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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 2Y15.03%
EPS Next 3Y12.88%
116.22
-0.03 (-0.03%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.92%
Inst Owner Change1.39%
Ins Owners1.24%
Ins Owner Change-0.01%
Market Cap11.69B
Revenue(TTM)5.80B
Net Income(TTM)539.10M
Analysts87.06
Price Target143.14 (23.16%)
Short Float %1.97%
Short Ratio2.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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)-0.65%
EPS NQ rev (3m)-0.2%
EPS NY rev (1m)0.33%
EPS NY rev (3m)1.22%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.48 | ||
| Fwd PE | 19.83 | ||
| P/S | 2.02 | ||
| P/FCF | 29.05 | ||
| P/OCF | 10.55 | ||
| P/B | 4.93 | ||
| P/tB | 15.01 | ||
| EV/EBITDA | 10.6 |
EPS(TTM)5.17
EY4.45%
EPS(NY)5.86
Fwd EY5.04%
FCF(TTM)4
FCFY3.44%
OCF(TTM)11.02
OCFY9.48%
SpS57.6
BVpS23.59
TBVpS7.74
PEG (NY)1.08
PEG (5Y)8.71
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 | 3.14 |
F-Score9
WACC8.72%
ROIC/WACC1.49
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 Y20.76%
EPS Next 2Y15.03%
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 2Y9.85%
Revenue Next 3Y9.28%
Revenue Next 5Y8.33%
EBIT growth 1Y21.88%
EBIT growth 3Y9.45%
EBIT growth 5Y4.54%
EBIT Next Year51.87%
EBIT Next 3Y21.54%
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 20.76% 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%.