NYSE:EHC

Stock Analysis Report

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Market Cap

US$8.3b

Last Updated

2021/07/31 22:14 UTC

Data Sources

Company Financials +

Executive Summary

Encompass Health Corporation provides facility-based and home-based post-acute healthcare services in the United States. More Details


Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Encompass Health's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EHC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: EHC's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

4.6%

EHC

-1.3%

US Healthcare

-0.5%

US Market


1 Year Return

22.3%

EHC

33.6%

US Healthcare

35.9%

US Market

Return vs Industry: EHC underperformed the US Healthcare industry which returned 33.7% over the past year.

Return vs Market: EHC underperformed the US Market which returned 35.9% over the past year.


Shareholder returns

EHCIndustryMarket
7 Day4.6%-1.3%-0.5%
30 Day4.4%-0.6%0.09%
90 Day-1.9%1.9%3.2%
1 Year24.1%22.3%35.3%33.6%38.0%35.9%
3 Year11.8%6.4%50.4%44.3%62.8%52.6%
5 Year115.2%96.6%100.4%85.4%121.2%96.9%

Long-Term Price Volatility Vs. Market

How volatile is Encompass Health's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Encompass Health undervalued compared to its fair value and its price relative to the market?

1.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EHC ($83.25) is trading below our estimate of fair value ($84.08)

Significantly Below Fair Value: EHC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: EHC is good value based on its PE Ratio (21.5x) compared to the US Healthcare industry average (22.4x).

PE vs Market: EHC is poor value based on its PE Ratio (21.5x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: EHC is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: EHC is overvalued based on its PB Ratio (4.7x) compared to the US Healthcare industry average (3.8x).


Future Growth

How is Encompass Health forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

8.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EHC's forecast earnings growth (8.4% per year) is above the savings rate (2%).

Earnings vs Market: EHC's earnings (8.4% per year) are forecast to grow slower than the US market (14.9% per year).

High Growth Earnings: EHC's earnings are forecast to grow, but not significantly.

Revenue vs Market: EHC's revenue (7.9% per year) is forecast to grow slower than the US market (9.2% per year).

High Growth Revenue: EHC's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EHC's Return on Equity is forecast to be high in 3 years time (21.8%)


Past Performance

How has Encompass Health performed over the past 5 years?

6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EHC has high quality earnings.

Growing Profit Margin: EHC's current net profit margins (7.8%) are higher than last year (6.2%).


Past Earnings Growth Analysis

Earnings Trend: EHC's earnings have grown by 6.5% per year over the past 5 years.

Accelerating Growth: EHC's earnings growth over the past year (34.7%) exceeds its 5-year average (6.5% per year).

Earnings vs Industry: EHC earnings growth over the past year (34.7%) underperformed the Healthcare industry 43.9%.


Return on Equity

High ROE: Whilst EHC's Return on Equity (22.04%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is Encompass Health's financial position?


Financial Position Analysis

Short Term Liabilities: EHC's short term assets ($859.3M) exceed its short term liabilities ($804.5M).

Long Term Liabilities: EHC's short term assets ($859.3M) do not cover its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: EHC's debt to equity ratio (124.5%) is considered high.

Reducing Debt: EHC's debt to equity ratio has reduced from 318.1% to 124.5% over the past 5 years.

Debt Coverage: EHC's debt is well covered by operating cash flow (31.6%).

Interest Coverage: EHC's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet


Dividend

What is Encompass Health current dividend yield, its reliability and sustainability?

1.35%

Current Dividend Yield


Upcoming Dividend Payment

TodayAug 01 2021Ex Dividend DateSep 30 2021Dividend Pay DateOct 15 202115 days from Ex DividendBuy in the next 59 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: EHC's dividend (1.35%) is higher than the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: EHC's dividend (1.35%) is low compared to the top 25% of dividend payers in the US market (3.54%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, EHC has been paying a dividend for less than 10 years.

Growing Dividend: EHC's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.9%), EHC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.9yrs

Average management tenure


CEO

Mark Tarr (59 yo)

4.58yrs

Tenure

US$6,925,127

Compensation

Mr. Mark J. Tarr serves as President, Chief Executive Officer And Director of Encompass Health Corp. since December 29, 2016. Mr. Tarr serves as the Principal Executive Officer and President at HEALTHSOUTH...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD6.93M) is about average for companies of similar size in the US market ($USD6.47M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: EHC's management team is seasoned and experienced (7.9 years average tenure).


Board Members

Experienced Board: EHC's board of directors are seasoned and experienced ( 11.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Encompass Health Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Encompass Health Corporation
  • Ticker: EHC
  • Exchange: NYSE
  • Founded: 1983
  • Industry: Health Care Facilities
  • Sector: Healthcare
  • Market Cap: US$8.288b
  • Shares outstanding: 99.55m
  • Website: https://www.encompasshealth.com

Number of Employees


Location

  • Encompass Health Corporation
  • 9001 Liberty Parkway
  • Birmingham
  • Alabama
  • 35242
  • United States

Listings


Biography

Encompass Health Corporation provides facility-based and home-based post-acute healthcare services in the United States. The company operates through two segments, Inpatient Rehabilitation, and Home Health...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 22:14
End of Day Share Price2021/07/30 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.