Overall EHC gets a fundamental rating of 6 out of 10. We evaluated EHC against 103 industry peers in the Health Care Providers & Services industry. EHC scores excellent on profitability, but there are some minor concerns on its financial health. EHC has a decent growth rate and is not valued too expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
Each year in the past 5 years EHC had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 7.85%, EHC belongs to the best of the industry, outperforming 90.29% of the companies in the same industry.
The Return On Equity of EHC (22.71%) is better than 90.29% of its industry peers.
EHC has a better Return On Invested Capital (12.98%) than 88.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EHC is in line with the industry average of 9.21%.
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

EHC has a better Profit Margin (9.30%) than 92.23% of its industry peers.
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 95.15% of its industry peers.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
With an excellent Gross Margin value of 95.65%, EHC belongs to the best of the industry, outperforming 99.03% of the companies in the same industry.
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%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

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.
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.
The debt/assets ratio for EHC has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.90 indicates that EHC is not a great score, but indicates only limited risk for bankruptcy at the moment.
EHC has a better Altman-Z score (2.90) than 60.19% 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.
Looking at the Debt to FCF ratio, with a value of 6.04, EHC is in the better half of the industry, outperforming 61.16% of the companies in the same industry.
A Debt/Equity ratio of 1.01 is on the high side and indicates that EHC has dependencies on debt financing.
EHC's Debt to Equity ratio of 1.01 is on the low side compared to the rest of the industry. EHC is outperformed by 60.19% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.01
Debt/FCF	6.04
Altman-Z	2.9

ROIC/WACC1.49

WACC8.74%

2.3 Liquidity

A Current Ratio of 1.14 indicates that EHC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.14, EHC is doing worse than 60.19% of the companies in the same industry.
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's Quick ratio of 1.14 is in line compared to the rest of the industry. EHC outperforms 45.63% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.14
Quick Ratio	1.14

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

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.
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 11.13% 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.
EHC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.33% yearly.

EPS Next Y20.91%

EPS Next 2Y15.1%

EPS Next 3Y12.88%

EPS Next 5Y12.24%

Revenue Next Year10.92%

Revenue Next 2Y9.83%

Revenue Next 3Y9.27%

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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 19.03, EHC is valued on the expensive side.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than the industry average as 73.79% of the companies are valued more expensively.
EHC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
Based on the Price/Forward Earnings ratio of 16.77, the valuation of EHC can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 74.76% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. EHC is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	19.03
Fwd PE	16.77

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than the industry average as 74.76% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 60.19% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	24.59
EV/EBITDA	9.24

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)0.91

PEG (5Y)7.37

EPS Next 2Y15.1%

EPS Next 3Y12.88%

More info and screens

Show best valued peers

5. Dividend

5.1 Amount

EHC has a yearly dividend return of 0.76%, which is pretty low.
The stock price of EHC dropped by -21.99% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
EHC's Dividend Yield is rather good when compared to the industry average which is at 0.45. EHC pays more dividend than 84.47% of the companies in the same industry.
With a Dividend Yield of 0.76, EHC pays less dividend than the S&P500 average, which is at 1.81.

		Industry Rank	Sector Rank
Dividend Yield	0.76%

5.2 History

The dividend of EHC decreases each year by -10.71%.
EHC has paid a dividend for at least 10 years, which is a reliable track record.
EHC has decreased its dividend recently.

Dividend Growth(5Y)-10.71%

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

EHC pays out 12.82% of its income as dividend. This is a sustainable payout ratio.

DP12.82%

EPS Next 2Y15.1%

EPS Next 3Y12.88%

More info and screens

Find the best dividend stocks

Show peers with best dividend

ENCOMPASS HEALTH CORP / EHC FAQ

What is the fundamental rating for EHC stock?

ChartMill assigns a fundamental rating of 6 / 10 to EHC.

What is the valuation status for EHC stock?

ChartMill assigns a valuation rating of 6 / 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 financial health of ENCOMPASS HEALTH CORP (EHC) stock?

The financial health rating of ENCOMPASS HEALTH CORP (EHC) is 4 / 10.

Is the dividend of ENCOMPASS HEALTH CORP sustainable?

The dividend rating of ENCOMPASS HEALTH CORP (EHC) is 4 / 10 and the dividend payout ratio is 12.82%.