ENCOMPASS HEALTH CORP (EHC) Stock Fundamental Analysis
NYSE:EHC - New York Stock Exchange, Inc. - US29261A1007 - Common Stock - Currency: USD
Taking everything into account, EHC scores 6 out of 10 in our fundamental rating. EHC was compared to 102 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 is valied quite expensively at the moment, while it does show a decent 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.
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 6.93%. This is amongst the best in the industry. EHC outperforms 87.25% of its industry peers.
Looking at the Return On Equity, with a value of 21.90%, EHC belongs to the top of the industry, outperforming 87.25% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.01%, EHC belongs to the best of the industry, outperforming 88.24% 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 9.13%.
The 3 year average ROIC (10.83%) for EHC is below the current ROIC(12.01%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.93% | ||
| ROE | 21.9% | ||
| ROIC | 12.01% |
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 8.42%, EHC belongs to the best of the industry, outperforming 90.20% of the companies in the same industry.
In the last couple of years the Profit Margin of EHC has grown nicely.
EHC has a Operating Margin of 16.09%. This is amongst the best in the industry. EHC outperforms 91.18% of its industry peers.
In the last couple of years the Operating Margin of EHC has remained more or less at the same level.
EHC's Gross Margin of 95.55% is amongst the best of the industry. EHC outperforms 99.02% 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 | 16.09% | ||
| PM (TTM) | 8.42% | ||
| GM | 95.55% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EHC is still creating some value.
EHC has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, EHC has more shares outstanding
Compared to 1 year ago, EHC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.01 indicates that EHC is not in any danger for bankruptcy at the moment.
EHC has a Altman-Z score of 3.01. This is in the better half of the industry: EHC outperforms 66.67% of its industry peers.
EHC has a debt to FCF ratio of 6.93. This is a slightly negative value and a sign of low solvency as EHC would need 6.93 years to pay back of all of its debts.
The Debt to FCF ratio of EHC (6.93) is better than 60.78% of its industry peers.
EHC has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.14, EHC is not doing good in the industry: 65.69% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 6.93 | ||
| Altman-Z | 3.01 |
ROIC/WACC1.49
WACC8.08%
2.3 Liquidity
EHC has a Current Ratio of 1.05. 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 Current ratio of 1.05 is on the low side compared to the rest of the industry. EHC is outperformed by 73.53% of its industry peers.
A Quick Ratio of 1.05 indicates that EHC should not have too much problems paying its short term obligations.
EHC's Quick ratio of 1.05 is on the low side compared to the rest of the industry. EHC is outperformed by 67.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
EHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.62%, 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)20.62%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%22.32%
Revenue 1Y (TTM)11.91%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%10.59%
3.2 Future
The Earnings Per Share is expected to grow by 5.48% on average over the next years.
EHC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.05% yearly.
EPS Next Y9.57%
EPS Next 2Y10.28%
EPS Next 3Y10.25%
EPS Next 5Y5.48%
Revenue Next Year9.49%
Revenue Next 2Y9.07%
Revenue Next 3Y8.76%
Revenue Next 5Y8.05%
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
EHC is valuated rather expensively with a Price/Earnings ratio of 24.92.
EHC's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.22. EHC is around the same levels.
A Price/Forward Earnings ratio of 21.65 indicates a rather expensive valuation of EHC.
Based on the Price/Forward Earnings ratio, EHC is valued a bit cheaper than 60.78% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.86, EHC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 21.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EHC indicates a somewhat cheap valuation: EHC is cheaper than 63.73% of the companies listed in the same industry.
EHC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.6 | ||
| EV/EBITDA | 12.1 |
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)2.6
PEG (5Y)9.66
EPS Next 2Y10.28%
EPS Next 3Y10.25%
5. Dividend
5.1 Amount
With a yearly dividend of 0.59%, EHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.56, EHC pays a better dividend. On top of this EHC pays more dividend than 81.37% of the companies listed 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 | 0.59% |
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.
Dividend Growth(5Y)-10.71%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
13.88% of the earnings are spent on dividend by EHC. This is a low number and sustainable payout ratio.
DP13.88%
EPS Next 2Y10.28%
EPS Next 3Y10.25%
116.64
+0.7 (+0.6%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners97.31%
Inst Owner Change0.09%
Ins Owners1.14%
Ins Owner Change-6.12%
Market Cap11.75B
Analysts86.25
Price Target119.53 (2.48%)
Short Float %2.52%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
Yearly Dividend0.62
Dividend Growth(5Y)-10.71%
DP13.88%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.55%
Min EPS beat(2)8.15%
Max EPS beat(2)12.94%
EPS beat(4)4
Avg EPS beat(4)12%
Min EPS beat(4)8.15%
Max EPS beat(4)18.5%
EPS beat(8)8
Avg EPS beat(8)15.52%
EPS beat(12)11
Avg EPS beat(12)10.73%
EPS beat(16)13
Avg EPS beat(16)10.14%
Revenue beat(2)2
Avg Revenue beat(2)0.73%
Min Revenue beat(2)0.72%
Max Revenue beat(2)0.75%
Revenue beat(4)3
Avg Revenue beat(4)0.63%
Min Revenue beat(4)-1.27%
Max Revenue beat(4)2.33%
Revenue beat(8)6
Avg Revenue beat(8)0.51%
Revenue beat(12)8
Avg Revenue beat(12)-3.05%
Revenue beat(16)8
Avg Revenue beat(16)-7.82%
PT rev (1m)-0.06%
PT rev (3m)0.59%
EPS NQ rev (1m)-0.66%
EPS NQ rev (3m)-0.57%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)0.68%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-0.28%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 21.65 | ||
| P/S | 2.19 | ||
| P/FCF | 32.6 | ||
| P/OCF | 11.71 | ||
| P/B | 5.68 | ||
| P/tB | 24.21 | ||
| EV/EBITDA | 12.1 |
EPS(TTM)4.68
EY4.01%
EPS(NY)5.39
Fwd EY4.62%
FCF(TTM)3.58
FCFY3.07%
OCF(TTM)9.96
OCFY8.54%
SpS53.35
BVpS20.52
TBVpS4.82
PEG (NY)2.6
PEG (5Y)9.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.93% | ||
| ROE | 21.9% | ||
| ROCE | 15.18% | ||
| ROIC | 12.01% | ||
| ROICexc | 12.19% | ||
| ROICexgc | 16.98% | ||
| OM | 16.09% | ||
| PM (TTM) | 8.42% | ||
| GM | 95.55% | ||
| FCFM | 6.71% |
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 Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 6.93 | ||
| Debt/EBITDA | 2.03 | ||
| Cap/Depr | 214.45% | ||
| Cap/Sales | 11.96% | ||
| Interest Coverage | 5.89 | ||
| Cash Conversion | 86.14% | ||
| Profit Quality | 79.61% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 3.01 |
F-Score8
WACC8.08%
ROIC/WACC1.49
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)20.62%
EPS 3Y1.63%
EPS 5Y2.58%
EPS Q2Q%22.32%
EPS Next Y9.57%
EPS Next 2Y10.28%
EPS Next 3Y10.25%
EPS Next 5Y5.48%
Revenue 1Y (TTM)11.91%
Revenue growth 3Y10.2%
Revenue growth 5Y3.13%
Sales Q2Q%10.59%
Revenue Next Year9.49%
Revenue Next 2Y9.07%
Revenue Next 3Y8.76%
Revenue Next 5Y8.05%
EBIT growth 1Y18.13%
EBIT growth 3Y9.45%
EBIT growth 5Y4.54%
EBIT Next Year45.19%
EBIT Next 3Y19.65%
EBIT Next 5YN/A
FCF growth 1Y34.59%
FCF growth 3Y29.84%
FCF growth 5Y9.28%
OCF growth 1Y17.87%
OCF growth 3Y11.89%
OCF growth 5Y9.56%