Encompass Health (NYSE:EHC) & DaVita (NYSE:DVA) Head-To-Head Analysis

Encompass Health (NYSE:EHC) and DaVita (NYSE:DVA) are both large-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Encompass Health and DaVita”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Encompass Health	$5.51 billion	2.20	$455.70 million	$4.84	24.83
DaVita	$12.97 billion	0.79	$936.34 million	$10.09	13.51

DaVita has higher revenue and earnings than Encompass Health. DaVita is trading at a lower price-to-earnings ratio than Encompass Health, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Encompass Health and DaVita, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Encompass Health	0	0	7	2	3.22
DaVita	1	4	1	0	2.00

Encompass Health presently has a consensus target price of $127.00, suggesting a potential upside of 5.68%. DaVita has a consensus target price of $164.50, suggesting a potential upside of 20.65%. Given DaVita’s higher possible upside, analysts plainly believe DaVita is more favorable than Encompass Health.

Risk & Volatility

Encompass Health has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, DaVita has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Encompass Health and DaVita’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Encompass Health	8.97%	17.63%	7.33%
DaVita	6.63%	176.11%	4.66%

Institutional and Insider Ownership

97.3% of Encompass Health shares are owned by institutional investors. Comparatively, 90.1% of DaVita shares are owned by institutional investors. 2.0% of Encompass Health shares are owned by company insiders. Comparatively, 2.0% of DaVita shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Encompass Health beats DaVita on 8 of the 14 factors compared between the two stocks.

About Encompass Health

Encompass Health Corporation provides post-acute healthcare services in the United States and Puerto Rico. It owns and operates inpatient rehabilitation hospitals that provide medical, nursing, therapy, and ancillary services. The company provides specialized rehabilitative treatment on an inpatient basis to patients who have experienced physical or cognitive disabilities or injuries due to medical conditions, such as strokes, hip fractures, and various debilitating neurological conditions. It offers services through the Medicare program to federal government, managed care plans and private insurers, state governments, and other patients. The company was formerly known as HealthSouth Corporation and changed its name to Encompass Health Corporation in January 2018. The company was incorporated in 1984 and is based in Birmingham, Alabama.

About DaVita

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also offers outpatient, hospital inpatient, and home-based hemodialysis services; operates clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company offers integrated care and disease management services to patients in risk-based and other integrated care arrangements; clinical research programs; physician services; and comprehensive kidney care services. Further, it engages in the provision of acute inpatient dialysis services and related laboratory services; and transplant software business. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in September 2016. DaVita Inc. was incorporated in 1994 and is headquartered in Denver, Colorado.