ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - NYSE:EHC - US29261A1007 - Common Stock
113.46 USD
-0.82 (-0.72%)
114 USD
+0.54 (+0.48%)
We assign a fundamental rating of 6 out of 10 to EHC. EHC was compared to 100 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 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.
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 91.00% of its industry peers.
EHC has a better Return On Equity (22.71%) than 90.00% of its industry peers.
EHC has a Return On Invested Capital of 12.98%. This is amongst the best in the industry. EHC outperforms 90.00% 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 9.40%.
The 3 year average ROIC (10.83%) for EHC is below the current ROIC(12.98%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 9.30%, EHC belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
In the last couple of years the Profit Margin of EHC has grown nicely.
The Operating Margin of EHC (17.29%) is better than 94.00% of its industry peers.
EHC's Operating Margin has been stable in the last couple of years.
EHC has a Gross Margin of 95.65%. This is amongst the best in the industry. EHC outperforms 99.00% 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 | 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EHC is creating some value.
The number of shares outstanding for EHC has been increased compared to 1 year ago.
The number of shares outstanding for EHC has been increased compared to 5 years ago.
Compared to 1 year ago, EHC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.11 indicates that EHC is not in any danger for bankruptcy at the moment.
The Altman-Z score of EHC (3.11) is better than 66.00% of its industry peers.
EHC has a debt to FCF ratio of 6.04. This is a slightly negative value and a sign of low solvency as EHC would need 6.04 years to pay back of all of its debts.
EHC has a Debt to FCF ratio of 6.04. This is in the better half of the industry: EHC outperforms 61.00% 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.
Looking at the Debt to Equity ratio, with a value of 1.01, EHC is doing worse than 61.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 3.11 |
ROIC/WACC1.45
WACC8.94%
2.3 Liquidity
EHC has a Current 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.
The Current ratio of EHC (1.14) is worse than 63.00% of 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
The Earnings Per Share has grown by an impressive 22.80% over the past year.
EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.58% yearly.
EHC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.13%.
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.
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.
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
The Price/Earnings ratio is 21.95, which indicates a rather expensive current valuation of EHC.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 63.00% of the companies in the same industry.
EHC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.89.
A Price/Forward Earnings ratio of 19.36 indicates a rather expensive valuation of EHC.
The rest of the industry has a similar Price/Forward Earnings ratio as EHC.
EHC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.95 | ||
| Fwd PE | 19.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than the industry average as 69.00% of the companies are valued more expensively.
EHC's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.38 | ||
| EV/EBITDA | 10.45 |
4.3 Compensation for Growth
The 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 12.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.06
PEG (5Y)8.5
EPS Next 2Y15.03%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
EHC has a yearly dividend return of 0.67%, which is pretty low.
EHC's Dividend Yield is rather good when compared to the industry average which is at 2.57. EHC pays more dividend than 83.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
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.
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 2Y15.03%
EPS Next 3Y12.88%
113.46
-0.82 (-0.72%)
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 Change1.36%
Ins Owners1.24%
Ins Owner Change-0.01%
Market Cap11.43B
Revenue(TTM)5.80B
Net Income(TTM)539.10M
Analysts87.06
Price Target141.87 (25.04%)
Short Float %1.67%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
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)1.21%
PT rev (3m)4.57%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)0.42%
EPS NY rev (1m)0.33%
EPS NY rev (3m)5.78%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.13%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.95 | ||
| Fwd PE | 19.36 | ||
| P/S | 1.97 | ||
| P/FCF | 28.38 | ||
| P/OCF | 10.31 | ||
| P/B | 4.81 | ||
| P/tB | 14.67 | ||
| EV/EBITDA | 10.45 |
EPS(TTM)5.17
EY4.56%
EPS(NY)5.86
Fwd EY5.17%
FCF(TTM)4
FCFY3.52%
OCF(TTM)11
OCFY9.7%
SpS57.54
BVpS23.57
TBVpS7.73
PEG (NY)1.06
PEG (5Y)8.5
Graham Number52.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 22.71% | ||
| ROCE | 16.42% | ||
| ROIC | 12.98% | ||
| ROICexc | 13.09% | ||
| ROICexgc | 17.77% | ||
| 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 | 3.11 |
F-Score9
WACC8.94%
ROIC/WACC1.45
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 4 / 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%.