Encompass Health Corp (EHC)vsJohnson & Johnson (JNJ)
EHC
Encompass Health Corp
$121.71
+0.55%
HEALTHCARE · Cap: $11.99B
JNJ
Johnson & Johnson
$265.58
-0.29%
HEALTHCARE · Cap: $640.02B
Smart Verdict
WallStSmart Research — data-driven comparison
Johnson & Johnson generates 1478% more annual revenue ($97.93B vs $6.21B). JNJ leads profitability with a 21.5% profit margin vs 10.0%. EHC appears more attractively valued with a PEG of 0.41. EHC earns a higher WallStSmart Score of 71/100 (B).
EHC
Strong Buy71
out of 100
Grade: B
JNJ
Buy59
out of 100
Grade: C
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-52.0%
Fair Value
$74.61
Current Price
$121.71
$47.10 premium
Margin of Safety
-88.9%
Fair Value
$140.57
Current Price
$265.58
$125.01 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Growing faster than its price suggests
Every $100 of equity generates 24 in profit
Mega-cap, among the largest globally
Every $100 of equity generates 25 in profit
Keeps 22 of every $100 in revenue as profit
Strong operational efficiency at 29.2%
Generating 3.4B in free cash flow
Areas to Watch
Elevated debt levels
Premium valuation, high expectations priced in
Expensive relative to growth rate
Earnings declined 0.9%
Comparative Analysis Report
WallStSmart ResearchBull Case : EHC
The strongest argument for EHC centers on PEG Ratio, Return on Equity. PEG of 0.41 suggests the stock is reasonably priced for its growth.
Bull Case : JNJ
The strongest argument for JNJ centers on Market Cap, Return on Equity, Profit Margin. Profitability is solid with margins at 21.5% and operating margin at 29.2%.
Bear Case : EHC
The primary concerns for EHC are Debt/Equity.
Bear Case : JNJ
The primary concerns for JNJ are P/E Ratio, PEG Ratio, EPS Growth.
Key Dynamics to Monitor
EHC profiles as a value stock while JNJ is a mature play — different risk/reward profiles.
EHC carries more volatility with a beta of 0.61 — expect wider price swings.
EHC is growing revenue faster at 9.6% — sustainability is the question.
JNJ generates stronger free cash flow (3.4B), providing more financial flexibility.
Bottom Line
EHC scores higher overall (71/100 vs 59/100). Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Encompass Health Corp
HEALTHCARE · MEDICAL CARE FACILITIES · USA
Encompass Health Corporation offers in-home and post-acute health care services in the United States. The company is headquartered in Birmingham, Alabama.
Johnson & Johnson
HEALTHCARE · DRUG MANUFACTURERS - GENERAL · USA
Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company is ranked No. 36 on the 2021 Fortune 500 list of the largest United States corporations by total revenue. Johnson & Johnson is one of the world's most valuable companies, and is one of only two U.S.-based companies that has a prime credit rating of AAA, higher than that of the United States government.
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