Encompass Health (NYSE: EHC) and HealthStream (NASDAQ:HSTM) are both healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.
Valuation and Earnings
This table compares Encompass Health and HealthStream’s 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||1.44||$256.30 million||$2.71||21.44|
|HealthStream||$247.66 million||3.23||$10.00 million||$0.31||80.55|
Volatility and Risk
Encompass Health has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.
Encompass Health pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. HealthStream does not pay a dividend. Encompass Health pays out 36.9% of its earnings in the form of a dividend.
Institutional and Insider Ownership
91.4% of Encompass Health shares are held by institutional investors. Comparatively, 71.0% of HealthStream shares are held by institutional investors. 1.6% of Encompass Health shares are held by insiders. Comparatively, 21.1% of HealthStream 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.
This is a summary of current ratings for Encompass Health and HealthStream, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Encompass Health currently has a consensus price target of $60.00, indicating a potential upside of 3.25%. HealthStream has a consensus price target of $25.67, indicating a potential upside of 2.79%. Given Encompass Health’s higher probable upside, equities research analysts clearly believe Encompass Health is more favorable than HealthStream.
This table compares Encompass Health and HealthStream’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Encompass Health beats HealthStream on 9 of the 15 factors compared between the two stocks.
Encompass Health Company Profile
Encompass Health Corporation, formerly HealthSouth Corporation, is a provider of post-acute healthcare services, offering both facility-based and home-based post-acute services in 35 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. The Company manages its operations through segments, including inpatient rehabilitation, and home health and hospice. It is an owner and operator of inpatient rehabilitation hospitals. It provides specialized rehabilitative treatment on both an inpatient and outpatient basis. It offers its home health and hospice services through Encompass Home Health and Hospice business (Encompass). Encompass operates home health and hospice agencies in 25 states, with concentrations in the Southeast, Oklahoma, and Texas. As of December 31, 2016, the Company operated 123 inpatient rehabilitation hospitals.
HealthStream Company Profile
HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.
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