ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
USA - NYSE:EHC - US29261A1007 - Common Stock
124.535 USD
+1.53 (+1.25%)
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. EHC has an excellent profitability rating, but 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
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.
In the past 5 years EHC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of EHC (7.67%) is better than 90.00% of its industry peers.
EHC's Return On Equity of 22.82% is amongst the best of the industry. EHC outperforms 89.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.93%, EHC belongs to the top of the industry, outperforming 89.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EHC is in line with the industry average of 9.33%.
The 3 year average ROIC (10.83%) for EHC is below the current ROIC(12.93%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 9.18%, EHC belongs to the best of the industry, outperforming 91.00% of the companies in the same industry.
EHC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.07%, EHC belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
EHC has a better Gross Margin (95.62%) than 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EHC is creating some value.
Compared to 1 year ago, EHC has more shares outstanding
The number of shares outstanding for EHC has been increased compared to 5 years ago.
EHC has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.18 indicates that EHC is not in any danger for bankruptcy at the moment.
EHC has a Altman-Z score of 3.18. This is in the better half of the industry: EHC outperforms 62.00% of its industry peers.
EHC has a debt to FCF ratio of 5.60. This is a neutral value as EHC would need 5.60 years to pay back of all of its debts.
EHC's Debt to FCF ratio of 5.60 is fine compared to the rest of the industry. EHC outperforms 65.00% of its industry peers.
EHC has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
EHC has a Debt to Equity ratio of 1.02. This is in the lower half of the industry: EHC underperforms 63.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 3.18 |
ROIC/WACC1.51
WACC8.55%
2.3 Liquidity
A Current Ratio of 1.06 indicates that EHC should not have too much problems paying its short term obligations.
EHC has a worse Current ratio (1.06) than 71.00% of its industry peers.
A Quick Ratio of 1.06 indicates that EHC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.06, EHC is doing worse than 67.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.02% 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.
Looking at the last year, EHC shows a quite strong growth in Revenue. The Revenue has grown by 11.80% in the last year.
The Revenue has been growing slightly by 3.13% on average over the past years.
EPS 1Y (TTM)23.02%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%26.13%
Revenue 1Y (TTM)11.8%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%12.03%
3.2 Future
The Earnings Per Share is expected to grow by 11.83% 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 8.37% yearly.
EPS Next Y20.36%
EPS Next 2Y14.99%
EPS Next 3Y13.07%
EPS Next 5Y11.83%
Revenue Next Year10.96%
Revenue Next 2Y9.87%
Revenue Next 3Y9.27%
Revenue Next 5Y8.37%
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.
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
A Price/Earnings ratio of 25.06 indicates a quite expensive 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 is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 21.26, EHC is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as EHC.
EHC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.06 | ||
| Fwd PE | 21.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EHC is valued a bit cheaper than 65.00% of the companies in the same industry.
EHC's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.56 | ||
| EV/EBITDA | 11.5 |
4.3 Compensation for Growth
The 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 13.07% in the coming years.
PEG (NY)1.23
PEG (5Y)9.71
EPS Next 2Y14.99%
EPS Next 3Y13.07%
5. Dividend
5.1 Amount
With a yearly dividend of 0.62%, 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 2.44. EHC pays more dividend than 81.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, EHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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.
The dividend of EHC decreased 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 2Y14.99%
EPS Next 3Y13.07%
NYSE:EHC (10/17/2025, 3:24:54 PM)
124.535
+1.53 (+1.25%)
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-0.02%
Ins Owners1.24%
Ins Owner Change0.56%
Market Cap12.54B
Analysts87.06
Price Target140.17 (12.55%)
Short Float %1.48%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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)1.23%
PT rev (3m)4.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.85%
EPS NY rev (1m)0.89%
EPS NY rev (3m)5.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.06 | ||
| Fwd PE | 21.26 | ||
| P/S | 2.21 | ||
| P/FCF | 28.56 | ||
| P/OCF | 11.35 | ||
| P/B | 5.5 | ||
| P/tB | 18.41 | ||
| EV/EBITDA | 11.5 |
EPS(TTM)4.97
EY3.99%
EPS(NY)5.86
Fwd EY4.7%
FCF(TTM)4.36
FCFY3.5%
OCF(TTM)10.98
OCFY8.81%
SpS56.29
BVpS22.64
TBVpS6.76
PEG (NY)1.23
PEG (5Y)9.71
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%
ROICexcg growth 3Y1.55%
ROICexcg 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 | 3.18 |
F-Score8
WACC8.55%
ROIC/WACC1.51
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)23.02%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%26.13%
EPS Next Y20.36%
EPS Next 2Y14.99%
EPS Next 3Y13.07%
EPS Next 5Y11.83%
Revenue 1Y (TTM)11.8%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%12.03%
Revenue Next Year10.96%
Revenue Next 2Y9.87%
Revenue Next 3Y9.27%
Revenue Next 5Y8.37%
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%