Comprehensive Stock Comparison
Compare Encompass Health Corporation (EHC) vs The Pennant Group, Inc. (PNTG) 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 | PNTG | 36.3% revenue growth vs EHC's 10.5% |
| Value | EHC | Lower P/E (18.2x vs 25.8x), PEG 1.28 vs 2.57 |
| Quality / Margins | EHC | 9.3% net margin vs PNTG's 3.1% |
| Stability / Safety | EHC | Beta 0.49 vs PNTG's 0.54, lower leverage |
| Dividends | EHC | 0.6% yield; 2-year raise streak; PNTG pays no meaningful dividend |
| Momentum (1Y) | PNTG | +48.0% vs EHC's +8.4% |
| Efficiency (ROA) | EHC | 7.9% ROA vs PNTG's 3.1%, ROIC 12.7% vs 5.7% |
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.
The Pennant Group operates a network of home health, hospice, and senior living facilities across the United States. It generates revenue primarily from Medicare and Medicaid reimbursements for home health and hospice services—roughly 70% of total revenue—with the remainder coming from private pay and insurance for senior living communities. The company's decentralized operating model—which grants local leaders significant autonomy—creates a competitive advantage through better community integration and operational efficiency compared to more centralized healthcare providers.
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
EHC leads in 4 of 6 categories (Financial Metrics, Valuation Metrics). PNTG leads in 1 (Total Returns). 1 tied.
Financial Metrics (TTM)
EHC is the larger business by revenue, generating $5.8B annually — 6.1x PNTG's $948M. EHC is the more profitable business, keeping 9.3% of every revenue dollar as net income compared to PNTG's 3.1%. On growth, PNTG holds the edge at +53.2% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | EHCEncompass Health … | PNTGThe Pennant Group… |
|---|---|---|
| RevenueTrailing 12 months | $5.8B | $948M |
| EBITDAEarnings before interest/tax | $1.3B | $60M |
| Net IncomeAfter-tax profit | $541M | $30M |
| Free Cash FlowCash after capex | $403M | $33M |
| Gross MarginGross profit ÷ Revenue | +43.8% | +11.2% |
| Operating MarginEBIT ÷ Revenue | +17.3% | +5.5% |
| Net MarginNet income ÷ Revenue | +9.3% | +3.1% |
| FCF MarginFCF ÷ Revenue | +6.9% | +3.5% |
| Rev. Growth (YoY)Latest quarter vs prior year | +9.4% | +53.2% |
| EPS Growth (YoY)Latest quarter vs prior year | +17.0% | +50.0% |
Valuation Metrics
At 19.4x trailing earnings, EHC trades at a 52% valuation discount to PNTG's 40.1x P/E. Adjusting for growth (PEG ratio), EHC offers better value at 1.36x vs PNTG's 3.99x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | EHCEncompass Health … | PNTGThe Pennant Group… |
|---|---|---|
| Market CapShares × price | $10.8B | $1.2B |
| Enterprise ValueMkt cap + debt − cash | $11.0B | $1.6B |
| Trailing P/EPrice ÷ TTM EPS | 19.44x | 40.13x |
| Forward P/EPrice ÷ next-FY EPS est. | 18.22x | 25.82x |
| PEG RatioP/E ÷ EPS growth rate | 1.36x | 3.99x |
| EV / EBITDAEnterprise value multiple | 10.09x | 26.68x |
| Price / SalesMarket cap ÷ Revenue | 1.82x | 1.24x |
| Price / BookPrice ÷ Book value/share | 3.37x | 3.18x |
| Price / FCFMarket cap ÷ FCF | — | 24.35x |
Profitability & Efficiency
EHC delivers a 17.0% return on equity — every $100 of shareholder capital generates $17 in annual profit, vs $8 for PNTG. EHC carries lower financial leverage with a 0.08x debt-to-equity ratio, signaling a more conservative balance sheet compared to PNTG's 1.21x. On the Piotroski fundamental quality scale (0–9), EHC scores 7/9 vs PNTG's 3/9, reflecting strong financial health.
| Metric | EHCEncompass Health … | PNTGThe Pennant Group… |
|---|---|---|
| ROE (TTM)Return on equity | +17.0% | +7.9% |
| ROA (TTM)Return on assets | +7.9% | +3.1% |
| ROICReturn on invested capital | +12.7% | +5.7% |
| ROCEReturn on capital employed | +12.7% | +7.4% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 3 |
| Debt / EquityFinancial leverage | 0.08x | 1.21x |
| Net DebtTotal debt minus cash | $195M | $436M |
| Cash & Equiv.Liquid assets | $72M | $17M |
| Total DebtShort + long-term debt | $267M | $453M |
| Interest CoverageEBIT ÷ Interest expense | 8.12x | 202.23x |
Total Returns (with DRIP)
A $10,000 investment in EHC five years ago would be worth $17,548 today (with dividends reinvested), compared to $6,436 for PNTG. Over the past 12 months, PNTG leads with a +48.0% total return vs EHC's +8.4%. The 3-year compound annual growth rate (CAGR) favors PNTG at 30.9% vs EHC's 24.8% — a key indicator of consistent wealth creation.
| Metric | EHCEncompass Health … | PNTGThe Pennant Group… |
|---|---|---|
| YTD ReturnYear-to-date | +1.6% | +21.1% |
| 1-Year ReturnPast 12 months | +8.4% | +48.0% |
| 3-Year ReturnCumulative with dividends | +94.3% | +124.4% |
| 5-Year ReturnCumulative with dividends | +75.5% | -35.6% |
| 10-Year ReturnCumulative with dividends | +312.9% | +123.4% |
| CAGR (3Y)Annualised 3-year return | +24.8% | +30.9% |
Risk & Volatility
EHC is the less volatile stock with a 0.49 beta — it tends to amplify market swings less than PNTG's 0.54 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. PNTG currently trades 96.3% 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 … | PNTGThe Pennant Group… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.49x | 0.54x |
| 52-Week HighHighest price in past year | $127.99 | $35.00 |
| 52-Week LowLowest price in past year | $92.53 | $21.18 |
| % of 52W HighCurrent price vs 52-week peak | +84.3% | +96.3% |
| RSI (14)Momentum oscillator 0–100 | 55.6 | 48.3 |
| Avg Volume (50D)Average daily shares traded | 1.1M | 226K |
Analyst Outlook
Wall Street rates EHC as "Buy" and PNTG as "Buy". Consensus price targets imply 40.4% upside for EHC (target: $152) vs 15.7% for PNTG (target: $39). EHC is the only dividend payer here at 0.64% yield — a key consideration for income-focused portfolios.
| Metric | EHCEncompass Health … | PNTGThe Pennant Group… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $151.50 | $39.00 |
| # AnalystsCovering analysts | 26 | 7 |
| Dividend YieldAnnual dividend ÷ price | +0.6% | — |
| Dividend StreakConsecutive years of raises | 2 | 1 |
| Dividend / ShareAnnual DPS | $0.70 | — |
| Buyback YieldShare repurchases ÷ mkt cap | +1.5% | 0.0% |
Historical Charts
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Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 100 | 154.17 | +54.2% |
| The Pennant Group, … (PNTG) | 100 | 104.89 | +4.9% |
Encompass Health Co… (EHC) returned +75% over 5 years vs The Pennant Group, … (PNTG)'s -36%. A $10,000 investment in EHC 5 years ago would be worth $17,548 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | $3.6B | $5.9B | +62.9% |
| The Pennant Group, … (PNTG) | $251M | $948M | +277.6% |
Encompass Health Corporation's revenue grew from $3.6B (2016) to $5.9B (2025) — a 5.6% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 6.8% | 9.5% | +40.3% |
| The Pennant Group, … (PNTG) | 3.9% | 3.1% | -20.6% |
Encompass Health Corporation's net margin went from 7% (2016) to 10% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 14.6 | 19.1 | +30.8% |
| The Pennant Group, … (PNTG) | 384.5 | 33.5 | -91.3% |
Encompass Health Corporation has traded in a 13x–23x P/E range over 9 years; current trailing P/E is ~19x. The Pennant Group, Inc. has traded in a 32x–385x P/E range over 7 years; current trailing P/E is ~40x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Encompass Health Co… (EHC) | 2.59 | 5.55 | +114.3% |
| The Pennant Group, … (PNTG) | 0.35 | 0.84 | +140.0% |
Encompass Health Corporation's EPS grew from $2.59 (2016) to $5.55 (2025) — a 9% CAGR.
Chart 6Free Cash Flow — 5 Years
Encompass Health Corporation generated $-738M FCF in 2025 (-548% vs 2021). The Pennant Group, Inc. generated $48M FCF in 2025 (+297% vs 2021).
EHC vs PNTG: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is EHC or PNTG a better buy right now?
Encompass Health Corporation (EHC) offers the better valuation at 19.4x trailing P/E (18.2x 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 PNTG?
On trailing P/E, Encompass Health Corporation (EHC) is the cheapest at 19.4x versus The Pennant Group, Inc. at 40.1x. On forward P/E, Encompass Health Corporation is actually cheaper at 18.2x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Encompass Health Corporation wins at 1.28x versus The Pennant Group, Inc.'s 2.57x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — EHC or PNTG?
Over the past 5 years, Encompass Health Corporation (EHC) delivered a total return of +75.5%, compared to -35.6% for The Pennant Group, Inc. (PNTG). A $10,000 investment in EHC five years ago would be worth approximately $18K today (assuming dividends reinvested). Over 10 years, the gap is even starker: EHC returned +312.9% versus PNTG's +123.4%. 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 PNTG?
By beta (market sensitivity over 5 years), Encompass Health Corporation (EHC) is the lower-risk stock at 0.49β versus The Pennant Group, Inc.'s 0.54β — meaning PNTG is approximately 11% more volatile than EHC relative to the S&P 500. On balance sheet safety, Encompass Health Corporation (EHC) carries a lower debt/equity ratio of 8% versus 121% for The Pennant Group, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — EHC or PNTG?
Encompass Health Corporation (EHC) is the more profitable company, earning 9.5% net margin versus 3.1% for The Pennant Group, Inc. — meaning it keeps 9.5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: EHC leads at 12.8% versus 5.5% for PNTG. 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 PNTG 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, Encompass Health Corporation (EHC) is the more undervalued stock at a PEG of 1.28x versus The Pennant Group, Inc.'s 2.57x. A PEG below 1.5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Encompass Health Corporation (EHC) trades at 18.2x forward P/E versus 25.8x for The Pennant Group, Inc. — 7.6x 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 PNTG?
In this comparison, EHC (0.6% yield) pays a dividend. PNTG does not pay a meaningful dividend and should not be held primarily for income.
08Is EHC or PNTG better for a retirement portfolio?
For long-horizon retirement investors, Encompass Health Corporation (EHC) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.49), 0.6% yield, +312.9% 10Y return). Both have compounded well over 10 years (EHC: +312.9%, PNTG: +123.4%), 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 PNTG?
Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. EHC pays a dividend while PNTG does not, making them suitable for different income and tax situations. 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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