ENCOMPASS HEALTH CORP (EHC)
US29261A1007 - Common Stock
We assign a fundamental rating of 6 out of 10 to EHC. EHC was compared to 117 industry peers in the Health Care Providers & Services industry. While EHC belongs to the best of the industry regarding profitability, 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.
Each year in the past 5 years EHC has been profitable.
Each year in the past 5 years EHC had a positive operating cash flow.
1.2 Ratios
EHC has a Return On Assets of 5.73%. This is amongst the best in the industry. EHC outperforms 82.76% of its industry peers.
Looking at the Return On Equity, with a value of 21.22%, EHC belongs to the top of the industry, outperforming 89.66% of the companies in the same industry.
EHC's Return On Invested Capital of 10.48% is amongst the best of the industry. EHC outperforms 91.38% of its industry peers.
EHC had an Average Return On Invested Capital over the past 3 years of 9.54%. This is in line with the industry average of 8.61%.
The last Return On Invested Capital (10.48%) for EHC is above the 3 year average (9.54%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.73% | ||
| ROE | 21.22% | ||
| ROIC | 10.48% |
ROA(3y)5.5%
ROA(5y)5.35%
ROE(3y)21.09%
ROE(5y)21.51%
ROIC(3y)9.54%
ROIC(5y)9.18%
1.3 Margins
EHC's Profit Margin of 7.28% is amongst the best of the industry. EHC outperforms 90.52% of its industry peers.
In the last couple of years the Profit Margin of EHC has remained more or less at the same level.
EHC has a Operating Margin of 15.24%. This is amongst the best in the industry. EHC outperforms 96.55% of its industry peers.
EHC's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 95.45%, EHC belongs to the best of the industry, outperforming 100.00% 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 | 15.24% | ||
| PM (TTM) | 7.28% | ||
| GM | 95.45% |
OM growth 3Y0.82%
OM growth 5Y-0.89%
PM growth 3Y-2.85%
PM growth 5Y1.34%
GM growth 3Y0.09%
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.
EHC has more shares outstanding than it did 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 2.43 indicates that EHC is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.43, EHC is doing good in the industry, outperforming 66.38% of the companies in the same industry.
The Debt to FCF ratio of EHC is 10.13, which is on the high side as it means it would take EHC, 10.13 years of fcf income to pay off all of its debts.
EHC's Debt to FCF ratio of 10.13 is fine compared to the rest of the industry. EHC outperforms 60.34% of its industry peers.
EHC has a Debt/Equity ratio of 1.63. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.63, EHC is not doing good in the industry: 68.10% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.63 | ||
| Debt/FCF | 10.13 | ||
| Altman-Z | 2.43 |
ROIC/WACC1.31
WACC8.02%
2.3 Liquidity
EHC has a Current Ratio of 1.28. 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 Current ratio, with a value of 1.28, EHC is in line with its industry, outperforming 45.69% of the companies in the same industry.
A Quick Ratio of 1.28 indicates that EHC should not have too much problems paying its short term obligations.
EHC has a Quick ratio of 1.28. This is comparable to the rest of the industry: EHC outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.28 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.74% over the past year.
EHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.06% yearly.
Looking at the last year, EHC shows a quite strong growth in Revenue. The Revenue has grown by 10.41% in the last year.
The Revenue has been growing slightly by 2.34% on average over the past years.
EPS 1Y (TTM)6.74%
EPS 3Y7.99%
EPS 5Y0.06%
EPS growth Q2Q7.95%
Revenue 1Y (TTM)10.41%
Revenue growth 3Y10.42%
Revenue growth 5Y2.34%
Revenue growth Q2Q9.63%
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 11.49% yearly.
Based on estimates for the next years, EHC will show a quite strong growth in Revenue. The Revenue will grow by 9.09% on average per year.
EPS Next Y10.01%
EPS Next 2Y10.46%
EPS Next 3Y11.49%
EPS Next 5YN/A
Revenue Next Year9.8%
Revenue Next 2Y9.16%
Revenue Next 3Y9.09%
Revenue Next 5YN/A
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
Based on the Price/Earnings ratio of 22.92, the valuation of EHC can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 69.83% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.06. EHC is around the same levels.
Based on the Price/Forward Earnings ratio of 20.83, the valuation of EHC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, EHC is valued a bit cheaper than 66.38% of the companies in the same industry.
EHC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.92 | ||
| Fwd PE | 20.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, EHC is valued a bit cheaper than the industry average as 62.07% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.21 | ||
| EV/EBITDA | 10.88 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of EHC may justify a higher PE ratio.
PEG (NY)2.29
PEG (5Y)416.41
EPS Next 2Y10.46%
EPS Next 3Y11.49%
5. Dividend
5.1 Amount
With a yearly dividend of 0.72%, EHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.73, EHC pays a better dividend. On top of this EHC pays more dividend than 81.90% of the companies listed in the same industry.
With a Dividend Yield of 0.72, EHC pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of EHC decreases each year by -10.00%.
EHC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-10%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
17.28% of the earnings are spent on dividend by EHC. This is a low number and sustainable payout ratio.
DP17.28%
EPS Next 2Y10.46%
EPS Next 3Y11.49%
ENCOMPASS HEALTH CORP
NYSE:EHC (5/2/2024, 7:04:00 PM)
After market: 83.42 0 (0%)83.42
+0.54 (+0.65%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap8.35B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.92 | ||
| Fwd PE | 20.83 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.29
PEG (5Y)416.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.73% | ||
| ROE | 21.22% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.24% | ||
| PM (TTM) | 7.28% | ||
| GM | 95.45% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.63 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.28 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)6.74%
EPS 3Y7.99%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.01%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.41%
Revenue growth 3Y10.42%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y