Encompass Health (NYSE:EHC) vs. Centene (NYSE:CNC) Financial Contrast

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

Risk & Volatility

Encompass Health has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Centene has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Encompass Health	$6.21 billion	1.94	$566.20 million	$6.14	19.91
Centene	$194.78 billion	0.17	-$6.67 billion	($10.44)	-6.32

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Encompass Health	10.01%	18.08%	8.22%
Centene	-2.51%	12.12%	3.20%

Insider & Institutional Ownership

97.3% of Encompass Health shares are owned by institutional investors. Comparatively, 93.6% of Centene shares are owned by institutional investors. 1.8% of Encompass Health shares are owned by insiders. Comparatively, 0.4% of Centene shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Encompass Health and Centene, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Encompass Health	0	1	5	1	3.00
Centene	2	10	9	0	2.33

Encompass Health currently has a consensus target price of $148.50, suggesting a potential upside of 21.50%. Centene has a consensus target price of $70.05, suggesting a potential upside of 6.23%. Given Encompass Health’s stronger consensus rating and higher possible upside, equities analysts clearly believe Encompass Health is more favorable than Centene.

Summary

Encompass Health beats Centene on 12 of the 15 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 Centene

Centene Corporation operates as a healthcare enterprise that provides programs and services to under-insured and uninsured families, commercial organizations, and military families in the United States. The company operates through Medicaid, Medicare, Commercial, and Other segments. The Medicaid segment offers health plan coverage, including medicaid expansion, aged, blind, disabled, children’s health insurance program, foster care, medicare-medicaid plans, long-term services and support. This segment also provides healthcare products. The Medicare segment offers special needs and medicare supplement, and prescription drug plans. The Commercial segment provides health insurance marketplace product for individual, small, and large group commercials. It also operates clinical healthcare and pharmacies, as well as offers dental and speech therapy services. In addition, the company engages in the government contracts business under the TRICARE program and other healthcare related government contracts. It provides services through primary and specialty care physicians, hospitals, and ancillary providers. Centene Corporation was founded in 1984 and is headquartered in Saint Louis, Missouri.