EHC vs SEM

For growth investors, Encompass Health Corporation (EHC) is the stronger pick with 10.

5% revenue growth year-over-year, versus 5. 1% for Select Medical Holdings Corporation (SEM). Select Medical Holdings Corporation (SEM) offers the better valuation at 13. 9x trailing P/E (13. 1x 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.

On trailing P/E, Select Medical Holdings Corporation (SEM) is the cheapest at 13.

9x versus Encompass Health Corporation at 19. 0x. On forward P/E, Select Medical Holdings Corporation is actually cheaper at 13. 1x.

Over the past 5 years, Encompass Health Corporation (EHC) delivered a total return of +60.

0%, compared to -15. 1% for Select Medical Holdings Corporation (SEM). Over 10 years, the gap is even starker: EHC returned +252. 2% versus SEM's +158. 5%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Encompass Health Corporation (EHC) is the lower-risk stock at 0.

40β versus Select Medical Holdings Corporation's 0. 46β — meaning SEM is approximately 14% 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 83% versus 182% for Select Medical Holdings Corporation — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Encompass Health Corporation (EHC) is pulling ahead at 10.

5% versus 5. 1% for Select Medical Holdings Corporation (SEM). On earnings-per-share growth, the picture is similar: Encompass Health Corporation grew EPS 24. 2% year-over-year, compared to -28. 9% for Select Medical Holdings Corporation. Over a 3-year CAGR, EHC leads at 10. 9% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Encompass Health Corporation (EHC) is the more profitable company, earning 9.

5% net margin versus 2. 7% for Select Medical Holdings Corporation — meaning it keeps 9. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: EHC leads at 17. 7% versus 6. 1% for SEM. At the gross margin level — before operating expenses — EHC leads at 95. 7%, 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.

On forward earnings alone, Select Medical Holdings Corporation (SEM) trades at 13.

1x forward P/E versus 18. 1x for Encompass Health Corporation — 5. 0x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for EHC: 45. 7% to $153. 00.

All stocks in this comparison pay dividends.

Select Medical Holdings Corporation (SEM) offers the highest yield at 1. 5%, versus 0. 7% for Encompass Health Corporation (EHC).

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.

40), 0. 7% yield, +252. 2% 10Y return). Both have compounded well over 10 years (EHC: +252. 2%, SEM: +158. 5%), 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.

Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: EHC is a mid-cap quality compounder stock; SEM is a small-cap deep-value stock. 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.