Encompass Health (NYSE:EHC – Get Free Report) and LifeStance Health Group (NASDAQ:LFST – Get Free Report) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings and price targets for Encompass Health and LifeStance Health Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Encompass Health | 0 | 0 | 7 | 1 | 3.13 |
| LifeStance Health Group | 1 | 0 | 5 | 1 | 2.86 |
Encompass Health currently has a consensus price target of $138.43, suggesting a potential upside of 9.19%. LifeStance Health Group has a consensus price target of $8.50, suggesting a potential upside of 56.83%. Given LifeStance Health Group’s higher probable upside, analysts clearly believe LifeStance Health Group is more favorable than Encompass Health.
Risk and Volatility
Earnings and Valuation
This table compares Encompass Health and LifeStance Health Group”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Encompass Health | $5.37 billion | 2.38 | $455.70 million | $5.11 | 24.81 |
| LifeStance Health Group | $1.25 billion | 1.69 | -$57.44 million | ($0.05) | -108.40 |
Encompass Health has higher revenue and earnings than LifeStance Health Group. LifeStance Health Group 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 LifeStance Health Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Encompass Health | 9.22% | 17.83% | 7.68% |
| LifeStance Health Group | -1.23% | -1.11% | -0.76% |
Insider and Institutional Ownership
97.3% of Encompass Health shares are owned by institutional investors. Comparatively, 85.5% of LifeStance Health Group shares are owned by institutional investors. 2.0% of Encompass Health shares are owned by insiders. Comparatively, 3.2% of LifeStance Health Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
Encompass Health beats LifeStance Health Group on 11 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 LifeStance Health Group
LifeStance Health Group, Inc., through its subsidiaries, provides outpatient mental health services to children, adolescents, adults, and geriatrics in the United States. The company offers patients a suite of mental health services, including psychiatric evaluations and treatment, psychological, and neuropsychological testing, as well as individual, family, and group therapy. It treats a range of mental health conditions, including anxiety, depression, bipolar disorder, eating disorders, psychotic disorders, and post-traumatic stress disorder. In addition, the company operates an outpatient mental health platform, as well as offers patient care virtually through its online delivery platform or in-person at its centers. LifeStance Health Group, Inc. was founded in 2017 and is headquartered in Scottsdale, Arizona.
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