Here's Why Encompass Health (EHC) is a Strong Value Stock
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.
Encompass Health (EHC)
Encompass Health Corporation is a provider of integrated healthcare services. It offers facility-based patient care through its network of inpatient rehabilitation hospitals. With a national footprint that includes 161 hospitals across 37 states and Puerto Rico, the company delivers high-quality, cost-effective, integrated care in the healthcare space. It provides a continuum of facility-based for its patients and their families, which will gain more prevalence as coordinated care and integrated delivery payment models, such as accountable care organizations and bundled payment arrangements.
EHC sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of B. Compared to the Medical - Outpatient and Home Healthcare industry's P/E of 20.8X, shares of Encompass Health are trading at a forward P/E of 19.4X. EHC also has a PEG Ratio of 1.4, a Price/Cash Flow ratio of 11.7X, and a Price/Sales ratio of 1.6X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.11 to $3.94 per share. EHC has an average earnings surprise of 20.1%.
EHC should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.
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Encompass Health Corporation (EHC) : Free Stock Analysis Report
