ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - NYSE:EHC - US29261A1007 - Common Stock
115.045 USD
+0.25 (+0.21%)
Taking everything into account, EHC scores 6 out of 10 in our fundamental rating. 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
EHC had positive earnings in the past year.
EHC had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 7.67%, EHC belongs to the best of the industry, outperforming 91.00% of the companies in the same industry.
EHC has a Return On Equity of 22.82%. This is amongst the best in the industry. EHC outperforms 90.00% of its industry peers.
EHC has a Return On Invested Capital of 12.93%. This is amongst the best in the industry. EHC outperforms 89.00% 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 9.45%.
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
EHC's Profit Margin of 9.18% is amongst the best of the industry. EHC outperforms 92.00% of its industry peers.
EHC's Profit Margin has improved in the last couple of years.
EHC's Operating Margin of 17.07% is amongst the best of the industry. EHC outperforms 94.00% of its industry peers.
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 99.00% of its industry peers.
EHC's Gross Margin has been stable in the last couple of years.
| 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.
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.
EHC has a better debt/assets ratio than last year.
2.2 Solvency
EHC has an Altman-Z score of 3.07. This indicates that EHC is financially healthy and has little risk of bankruptcy at the moment.
EHC's Altman-Z score of 3.07 is fine compared to the rest of the industry. EHC outperforms 64.00% of its industry peers.
The Debt to FCF ratio of EHC is 5.60, which is a neutral value as it means it would take EHC, 5.60 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.60, EHC is in the better half of the industry, outperforming 62.00% of the companies in the same industry.
A Debt/Equity ratio of 1.02 is on the high side and indicates that EHC has dependencies on debt financing.
EHC's Debt to Equity ratio of 1.02 is on the low side compared to the rest of the industry. EHC is outperformed by 61.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 3.07 |
ROIC/WACC1.43
WACC9.01%
2.3 Liquidity
EHC has a Current 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.
The Current ratio of EHC (1.06) is worse than 68.00% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.06, EHC is doing worse than 64.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
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.
EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.58% yearly.
Looking at the last year, EHC shows a quite strong growth in Revenue. The Revenue has grown by 11.91% in the last year.
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)11.91%
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.
Based on estimates for the next years, EHC will show a quite strong growth in Revenue. The Revenue will grow by 8.33% on average per year.
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
Based on the Price/Earnings ratio of 22.25, the valuation of EHC can be described as rather expensive.
Based on the Price/Earnings ratio, EHC is valued a bit cheaper than 63.00% of the companies in the same industry.
EHC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.34, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 19.63 indicates a rather expensive valuation of EHC.
EHC's Price/Forward Earnings ratio is in line with the industry average.
EHC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.25 | ||
| Fwd PE | 19.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than the industry average as 68.00% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as EHC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.38 | ||
| EV/EBITDA | 10.85 |
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)1.07
PEG (5Y)8.62
EPS Next 2Y15.03%
EPS Next 3Y12.88%
5. Dividend
5.1 Amount
With a yearly dividend of 0.66%, 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 2.55. EHC pays more dividend than 83.00% of the companies in the same industry.
With a Dividend Yield of 0.66, EHC pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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 12.89% of its income as dividend. This is a sustainable payout ratio.
DP12.89%
EPS Next 2Y15.03%
EPS Next 3Y12.88%
NYSE:EHC (11/13/2025, 10:45:02 AM)
115.045
+0.25 (+0.21%)
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 Change-0.31%
Ins Owners1.24%
Ins Owner Change-0.2%
Market Cap11.59B
Revenue(TTM)5.37B
Net Income(TTM)520.40M
Analysts87.06
Price Target141.87 (23.32%)
Short Float %1.67%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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)1.21%
PT rev (3m)4.57%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)3.49%
EPS NY rev (1m)0.33%
EPS NY rev (3m)5.78%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.25 | ||
| Fwd PE | 19.63 | ||
| P/S | 2.04 | ||
| P/FCF | 26.38 | ||
| P/OCF | 10.48 | ||
| P/B | 5.08 | ||
| P/tB | 17.01 | ||
| EV/EBITDA | 10.85 |
EPS(TTM)5.17
EY4.49%
EPS(NY)5.86
Fwd EY5.1%
FCF(TTM)4.36
FCFY3.79%
OCF(TTM)10.98
OCFY9.54%
SpS56.29
BVpS22.64
TBVpS6.76
PEG (NY)1.07
PEG (5Y)8.62
Graham Number51.32
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%
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-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 | 3.07 |
F-Score8
WACC9.01%
ROIC/WACC1.43
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)11.91%
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 1Y22.1%
EBIT growth 3Y9.45%
EBIT growth 5Y4.54%
EBIT Next Year51.87%
EBIT Next 3Y21.54%
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%
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 12.89%.