Comparing Encompass Health (NYSE:EHC) and Option Care Health (NASDAQ:OPCH)

Option Care Health (NASDAQ:OPCH) and Encompass Health (NYSE:EHC) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Option Care Health and Encompass Health, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Option Care Health	0	4	8	0	2.67
Encompass Health	0	0	8	1	3.11

Option Care Health currently has a consensus target price of $35.11, suggesting a potential upside of 29.13%. Encompass Health has a consensus target price of $139.86, suggesting a potential upside of 12.43%. Given Option Care Health’s higher possible upside, equities analysts clearly believe Option Care Health is more favorable than Encompass Health.

Valuation and Earnings

This table compares Option Care Health and Encompass Health”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Option Care Health	$5.00 billion	0.88	$211.82 million	$1.25	21.75
Encompass Health	$5.37 billion	2.33	$455.70 million	$5.11	24.34

Encompass Health has higher revenue and earnings than Option Care Health. Option Care Health 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 Option Care Health and Encompass Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Option Care Health	3.93%	17.53%	7.17%
Encompass Health	9.22%	17.83%	7.68%

Volatility and Risk

Option Care Health has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Encompass Health has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

98.1% of Option Care Health shares are owned by institutional investors. Comparatively, 97.3% of Encompass Health shares are owned by institutional investors. 0.6% of Option Care Health shares are owned by company insiders. Comparatively, 2.0% of Encompass Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Encompass Health beats Option Care Health on 12 of the 14 factors compared between the two stocks.

About Option Care Health

Option Care Health, Inc. offers home and alternate site infusion services in the United States. The company provides anti-infective therapies; home infusion services to treat heart failures; home parenteral nutrition and enteral nutrition support services for numerous acute and chronic conditions, such as stroke, cancer, and gastrointestinal diseases; immunoglobulin infusion therapies for the treatment of immune deficiencies; and treatments for chronic inflammatory disorders, including crohn’s disease, plaque psoriasis, psoriatic arthritis, rheumatoid arthritis, ulcerative colitis, and other chronic inflammatory disorders. It also offers treatments to manage the progression of neurological disorders, such as multiple sclerosis, duchenne muscular dystrophy, and other neurological disorder; infusion therapies for bleeding disorders, such as hemophilia and von Willebrand diseases; therapies for women with high-risk pregnancies; and other infusion therapies to treat various conditions, including pain management, chemotherapy, and respiratory medications, as well as nursing services. The company markets its services through patient referrals, including physicians, hospital discharge planners, hospital personnel, health maintenance organizations, and preferred provider organizations. Option Care Health, Inc. is headquartered in Bannockburn, Illinois.

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.