Encompass Health (NYSE:EHC – Get Free Report) and RadNet (NASDAQ:RDNT – Get Free Report) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.
Insider and Institutional Ownership
97.3% of Encompass Health shares are owned by institutional investors. Comparatively, 77.9% of RadNet shares are owned by institutional investors. 2.1% of Encompass Health shares are owned by company insiders. Comparatively, 5.6% of RadNet shares are owned by company 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.
Earnings & Valuation
This table compares Encompass Health and RadNet”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 | 2.35 | $455.70 million | $5.11 | 24.50 |
| RadNet | $1.83 billion | 3.30 | $2.79 million | ($0.20) | -392.20 |
Encompass Health has higher revenue and earnings than RadNet. RadNet is trading at a lower price-to-earnings ratio than Encompass Health, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations for Encompass Health and RadNet, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Encompass Health | 0 | 0 | 8 | 1 | 3.11 |
| RadNet | 1 | 0 | 4 | 3 | 3.13 |
Encompass Health currently has a consensus target price of $139.86, suggesting a potential upside of 11.73%. RadNet has a consensus target price of $76.80, suggesting a potential downside of 2.09%. Given Encompass Health’s higher possible upside, equities analysts plainly believe Encompass Health is more favorable than RadNet.
Risk and Volatility
Encompass Health has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, RadNet has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.
Profitability
This table compares Encompass Health and RadNet’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% |
| RadNet | -0.78% | 2.41% | 0.82% |
Summary
Encompass Health beats RadNet on 10 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 RadNet
RadNet, Inc., together with its subsidiaries, provides outpatient diagnostic imaging services in the United States. The company operates in two segments: Imaging Centers and Artificial Intelligence. Its services include magnetic resonance imaging, computed tomography, positron emission tomography, nuclear medicine, mammography, ultrasound, diagnostic radiology, fluoroscopy, and other related procedures, as well as multi-modality imaging services. The company also develops and sells computerized systems that distribute, display, store, and retrieve digital images; offers picture archiving communications systems and related services; and develops and deploys AI suites to enhance radiologist interpretation of breast, lung, and prostate images, as well as AI solutions for prostate cancer screening. RadNet, Inc. was founded in 1981 and is headquartered in Los Angeles, California.
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