Encompass Health Corp (EHC)vsMerck & Company Inc (MRK)
EHC
Encompass Health Corp
$121.71
+0.55%
HEALTHCARE · Cap: $11.99B
MRK
Merck & Company Inc
$143.93
-0.54%
HEALTHCARE · Cap: $355.10B
Smart Verdict
WallStSmart Research — data-driven comparison
Merck & Company Inc generates 973% more annual revenue ($66.57B vs $6.21B). EHC leads profitability with a 10.0% profit margin vs 4.8%. 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
MRK
Hold36
out of 100
Grade: F
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
-73.7%
Fair Value
$82.84
Current Price
$143.93
$61.09 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
Generating 4.5B in free cash flow
Areas to Watch
Elevated debt levels
Trading at 8.5x book value
ROE of 7.6% — below average capital efficiency
4.8% margin — thin
Elevated debt levels
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 : MRK
The strongest argument for MRK centers on Market Cap, Free Cash Flow.
Bear Case : EHC
The primary concerns for EHC are Debt/Equity.
Bear Case : MRK
The primary concerns for MRK are Price/Book, Return on Equity, Profit Margin. A P/E of 116.1x leaves little room for execution misses. Thin 4.8% margins leave little buffer for downturns.
Key Dynamics to Monitor
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.
MRK generates stronger free cash flow (4.5B), providing more financial flexibility.
Monitor MEDICAL CARE FACILITIES industry trends, competitive dynamics, and regulatory changes.
Bottom Line
EHC scores higher overall (71/100 vs 36/100). Both earn "Strong Buy" and "Hold" 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.
Merck & Company Inc
HEALTHCARE · DRUG MANUFACTURERS - GENERAL · USA
Merck & Co. is an American multinational pharmaceutical company headquartered in Kenilworth, New Jersey. It is named after the Merck family, which set up Merck Group in Germany in 1668.
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