Encompass Health (NYSE: EHC) and MEDNAX (NYSE:MD) are both mid-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.
Volatility and Risk
Encompass Health has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, MEDNAX has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Encompass Health and MEDNAX, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Encompass Health presently has a consensus price target of $62.33, indicating a potential upside of 9.65%. MEDNAX has a consensus price target of $55.33, indicating a potential upside of 5.22%. Given Encompass Health’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Encompass Health is more favorable than MEDNAX.
Valuation and Earnings
This table compares Encompass Health and MEDNAX’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Encompass Health||$3.97 billion||1.40||$256.30 million||$2.76||20.60|
|MEDNAX||$3.46 billion||1.43||$320.37 million||$3.15||16.70|
MEDNAX has lower revenue, but higher earnings than Encompass Health. MEDNAX is trading at a lower price-to-earnings ratio than Encompass Health, indicating that it is currently the more affordable of the two stocks.
This table compares Encompass Health and MEDNAX’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Encompass Health pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. MEDNAX does not pay a dividend. Encompass Health pays out 36.2% of its earnings in the form of a dividend.
Insider & Institutional Ownership
91.7% of Encompass Health shares are held by institutional investors. Comparatively, 98.5% of MEDNAX shares are held by institutional investors. 1.6% of Encompass Health shares are held by insiders. Comparatively, 2.7% of MEDNAX shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Encompass Health beats MEDNAX on 8 of the 15 factors compared between the two stocks.
Encompass Health Company Profile
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 and Hospice. The Inpatient Rehabilitation segment provides specialized rehabilitative treatment on an inpatient and outpatient basis to patients who are recovering from conditions, such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. The Home Health and Hospice segment provides home health and hospice services primarily in the Southeast and Texas. Its home health services include a range of Medicare-certified home nursing services to adult patients in need of care comprising skilled nursing, medical social work, and home health aide services, as well as physical, occupational, speech therapy, and others. This segment's hospice services comprise in-home services to terminally ill patients and their families to address patients' physical needs, including pain control and symptom management, and to provide emotional and spiritual support. As of March 1, 2018, Encompass Health Corporation operated 127 hospitals, and 237 home health and hospice agencies in 36 states and Puerto Rico. The company was formerly known as HealthSouth Corporation and changed its name to Encompass Health Corporation in January 2018. Encompass Health Corporation was founded in 1983 and is based in Birmingham, Alabama.
MEDNAX Company Profile
MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.
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