Comprehensive Stock Comparison
Compare Encompass Health Corporation (EHC) vs HCA Healthcare, Inc. (HCA) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | EHC | 10.5% revenue growth vs HCA's 7.1% |
| Value | HCA | Lower P/E (17.5x vs 18.2x), PEG 0.83 vs 1.28 |
| Quality / Margins | EHC | 9.3% net margin vs HCA's 9.0% |
| Stability / Safety | HCA | Beta 0.29 vs EHC's 0.49 |
| Dividends | EHC | 0.6% yield, 2-year raise streak, vs HCA's 0.6% |
| Momentum (1Y) | HCA | +73.9% vs EHC's +8.4% |
| Efficiency (ROA) | HCA | 11.2% ROA vs EHC's 7.9%, ROIC 19.9% vs 12.7% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Encompass Health operates a network of inpatient rehabilitation hospitals and home health/hospice services across the United States. It generates revenue primarily from Medicare reimbursements for its inpatient rehabilitation services — which account for the majority of its business — supplemented by home health and hospice care payments. The company's competitive advantage lies in its scale as the largest owner and operator of inpatient rehabilitation facilities in the country, creating operational efficiencies and referral network advantages.
HCA Healthcare is one of the largest for-profit hospital operators in the United States, providing comprehensive medical and surgical services through its network of acute care hospitals and outpatient facilities. It generates revenue primarily from patient services — including inpatient hospital stays, outpatient procedures, and emergency care — with the vast majority coming from government programs like Medicare and Medicaid alongside private insurance reimbursements. The company's scale advantage — operating over 180 hospitals concentrated in high-growth markets — creates significant purchasing power with suppliers and negotiating leverage with payers.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
HCA leads in 3 of 6 categories (Valuation Metrics, Total Returns). EHC leads in 1 (Financial Metrics). 2 tied.
Financial Metrics (TTM)
HCA is the larger business by revenue, generating $75.6B annually — 13.0x EHC's $5.8B. Profitability is closely matched — net margins range from 9.3% (EHC) to 9.0% (HCA).
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| RevenueTrailing 12 months | $5.8B | $75.6B |
| EBITDAEarnings before interest/tax | $1.3B | $15.5B |
| Net IncomeAfter-tax profit | $541M | $6.8B |
| Free Cash FlowCash after capex | $403M | $7.7B |
| Gross MarginGross profit ÷ Revenue | +43.8% | +41.5% |
| Operating MarginEBIT ÷ Revenue | +17.3% | +15.8% |
| Net MarginNet income ÷ Revenue | +9.3% | +9.0% |
| FCF MarginFCF ÷ Revenue | +6.9% | +10.2% |
| Rev. Growth (YoY)Latest quarter vs prior year | +9.4% | +6.7% |
| EPS Growth (YoY)Latest quarter vs prior year | +17.0% | +44.6% |
Valuation Metrics
At 18.7x trailing earnings, HCA trades at a 4% valuation discount to EHC's 19.4x P/E. Adjusting for growth (PEG ratio), HCA offers better value at 0.89x vs EHC's 1.36x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| Market CapShares × price | $10.8B | $118.5B |
| Enterprise ValueMkt cap + debt − cash | $11.0B | $167.6B |
| Trailing P/EPrice ÷ TTM EPS | 19.44x | 18.66x |
| Forward P/EPrice ÷ next-FY EPS est. | 18.22x | 17.50x |
| PEG RatioP/E ÷ EPS growth rate | 1.36x | 0.89x |
| EV / EBITDAEnterprise value multiple | 10.09x | 10.82x |
| Price / SalesMarket cap ÷ Revenue | 1.82x | 1.57x |
| Price / BookPrice ÷ Book value/share | 3.37x | — |
| Price / FCFMarket cap ÷ FCF | — | 15.40x |
Profitability & Efficiency
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| ROE (TTM)Return on equity | +17.0% | — |
| ROA (TTM)Return on assets | +7.9% | +11.2% |
| ROICReturn on invested capital | +12.7% | +19.9% |
| ROCEReturn on capital employed | +12.7% | +27.0% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 7 |
| Debt / EquityFinancial leverage | 0.08x | — |
| Net DebtTotal debt minus cash | $195M | $49.2B |
| Cash & Equiv.Liquid assets | $72M | $1.0B |
| Total DebtShort + long-term debt | $267M | $50.2B |
| Interest CoverageEBIT ÷ Interest expense | 8.12x | 5.37x |
Total Returns (with DRIP)
A $10,000 investment in HCA five years ago would be worth $30,878 today (with dividends reinvested), compared to $17,548 for EHC. Over the past 12 months, HCA leads with a +73.9% total return vs EHC's +8.4%. The 3-year compound annual growth rate (CAGR) favors HCA at 30.2% vs EHC's 24.8% — a key indicator of consistent wealth creation.
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| YTD ReturnYear-to-date | +1.6% | +12.6% |
| 1-Year ReturnPast 12 months | +8.4% | +73.9% |
| 3-Year ReturnCumulative with dividends | +94.3% | +120.8% |
| 5-Year ReturnCumulative with dividends | +75.5% | +208.8% |
| 10-Year ReturnCumulative with dividends | +312.9% | +688.3% |
| CAGR (3Y)Annualised 3-year return | +24.8% | +30.2% |
Risk & Volatility
HCA is the less volatile stock with a 0.29 beta — it tends to amplify market swings less than EHC's 0.49 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. HCA currently trades 95.8% from its 52-week high vs EHC's 84.3% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.49x | 0.29x |
| 52-Week HighHighest price in past year | $127.99 | $552.90 |
| 52-Week LowLowest price in past year | $92.53 | $295.00 |
| % of 52W HighCurrent price vs 52-week peak | +84.3% | +95.8% |
| RSI (14)Momentum oscillator 0–100 | 55.6 | 56.0 |
| Avg Volume (50D)Average daily shares traded | 1.1M | 879K |
Analyst Outlook
Wall Street rates EHC as "Buy" and HCA as "Buy". Consensus price targets imply 40.4% upside for EHC (target: $152) vs -1.1% for HCA (target: $524). For income investors, EHC offers the higher dividend yield at 0.64% vs HCA's 0.56%.
| Metric | EHCEncompass Health … | HCAHCA Healthcare, I… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $151.50 | $523.92 |
| # AnalystsCovering analysts | 26 | 46 |
| Dividend YieldAnnual dividend ÷ price | +0.6% | +0.6% |
| Dividend StreakConsecutive years of raises | 2 | 5 |
| Dividend / ShareAnnual DPS | $0.70 | $2.94 |
| Buyback YieldShare repurchases ÷ mkt cap | +1.5% | +8.5% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 100 | 154.17 | +54.2% |
| HCA Healthcare, Inc. (HCA) | 100 | 367.9 | +267.9% |
HCA Healthcare, Inc. (HCA) returned +209% over 5 years vs Encompass Health Co… (EHC)'s +75%. A $10,000 investment in HCA 5 years ago would be worth $30,878 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | $3.6B | $5.9B | +62.9% |
| HCA Healthcare, Inc. (HCA) | $41.5B | $75.6B | +82.2% |
Encompass Health Corporation's revenue grew from $3.6B (2016) to $5.9B (2025) — a 5.6% CAGR. HCA Healthcare, Inc.'s revenue grew from $41.5B (2016) to $75.6B (2025) — a 6.9% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 6.8% | 9.5% | +40.3% |
| HCA Healthcare, Inc. (HCA) | 7.0% | 9.0% | +28.8% |
Encompass Health Corporation's net margin went from 7% (2016) to 10% (2025). HCA Healthcare, Inc.'s net margin went from 7% (2016) to 9% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 14.6 | 19.1 | +30.8% |
| HCA Healthcare, Inc. (HCA) | 14.8 | 16.5 | +11.5% |
Encompass Health Corporation has traded in a 13x–23x P/E range over 9 years; current trailing P/E is ~19x. HCA Healthcare, Inc. has traded in a 12x–17x P/E range over 9 years; current trailing P/E is ~19x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 2.59 | 5.55 | +114.3% |
| HCA Healthcare, Inc. (HCA) | 7.3 | 28.38 | +288.8% |
Encompass Health Corporation's EPS grew from $2.59 (2016) to $5.55 (2025) — a 9% CAGR. HCA Healthcare, Inc.'s EPS grew from $7.30 (2016) to $28.38 (2025) — a 16% CAGR.
Chart 6Free Cash Flow — 5 Years
Encompass Health Corporation generated $-738M FCF in 2025 (-548% vs 2021). HCA Healthcare, Inc. generated $8B FCF in 2025 (+43% vs 2021).
EHC vs HCA: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is EHC or HCA a better buy right now?
HCA Healthcare, Inc. (HCA) offers the better valuation at 18.7x trailing P/E (17.5x forward), making it the more compelling value choice. Analysts rate Encompass Health Corporation (EHC) a "Buy" — based on 26 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — EHC or HCA?
On trailing P/E, HCA Healthcare, Inc. (HCA) is the cheapest at 18.7x versus Encompass Health Corporation at 19.4x. On forward P/E, HCA Healthcare, Inc. is actually cheaper at 17.5x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: HCA Healthcare, Inc. wins at 0.83x versus Encompass Health Corporation's 1.28x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — EHC or HCA?
Over the past 5 years, HCA Healthcare, Inc. (HCA) delivered a total return of +208.8%, compared to +75.5% for Encompass Health Corporation (EHC). A $10,000 investment in HCA five years ago would be worth approximately $31K today (assuming dividends reinvested). Over 10 years, the gap is even starker: HCA returned +688.3% versus EHC's +312.9%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — EHC or HCA?
By beta (market sensitivity over 5 years), HCA Healthcare, Inc. (HCA) is the lower-risk stock at 0.29β versus Encompass Health Corporation's 0.49β — meaning EHC is approximately 67% more volatile than HCA relative to the S&P 500.
05Which has better profit margins — EHC or HCA?
Encompass Health Corporation (EHC) is the more profitable company, earning 9.5% net margin versus 9.0% for HCA Healthcare, Inc. — meaning it keeps 9.5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: HCA leads at 15.8% versus 12.8% for EHC. At the gross margin level — before operating expenses — EHC leads at 47.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is EHC or HCA more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, HCA Healthcare, Inc. (HCA) is the more undervalued stock at a PEG of 0.83x versus Encompass Health Corporation's 1.28x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, HCA Healthcare, Inc. (HCA) trades at 17.5x forward P/E versus 18.2x for Encompass Health Corporation — 0.7x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for EHC: 40.4% to $151.50.
07Which pays a better dividend — EHC or HCA?
All stocks in this comparison pay dividends. Encompass Health Corporation (EHC) offers the highest yield at 0.6%, versus 0.6% for HCA Healthcare, Inc. (HCA).
08Is EHC or HCA better for a retirement portfolio?
For long-horizon retirement investors, HCA Healthcare, Inc. (HCA) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.29), 0.6% yield, +688.3% 10Y return). Both have compounded well over 10 years (HCA: +688.3%, EHC: +312.9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between EHC and HCA?
Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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