Encompass Health Corp (EHC)vsMerck & Company Inc (MRK)
EHC
Encompass Health Corp
$102.61
+0.90%
HEALTHCARE · Cap: $10.20B
MRK
Merck & Company Inc
$109.18
-1.60%
HEALTHCARE · Cap: $274.03B
Smart Verdict
WallStSmart Research — data-driven comparison
Merck & Company Inc generates 995% more annual revenue ($65.01B vs $5.94B). MRK leads profitability with a 28.1% profit margin vs 9.5%. EHC appears more attractively valued with a PEG of 0.41. EHC earns a higher WallStSmart Score of 70/100 (B).
EHC
Strong Buy70
out of 100
Grade: B
MRK
Buy59
out of 100
Grade: C
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+23.0%
Fair Value
$147.31
Current Price
$102.61
$44.70 discount
Margin of Safety
-13.2%
Fair Value
$96.48
Current Price
$109.18
$12.70 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Growing faster than its price suggests
Every $100 of equity generates 25 in profit
Earnings expanding 21.2% YoY
Mega-cap, among the largest globally
Every $100 of equity generates 37 in profit
Strong operational efficiency at 32.8%
Keeps 28 of every $100 in revenue as profit
Attractively priced relative to earnings
Generating 1.8B in free cash flow
Areas to Watch
No major concerns identified
Weak financial health signals
Expensive relative to growth rate
Earnings declined 19.3%
Comparative Analysis Report
WallStSmart ResearchBull Case : EHC
The strongest argument for EHC centers on PEG Ratio, Return on Equity, EPS Growth. 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, Return on Equity, Operating Margin. Profitability is solid with margins at 28.1% and operating margin at 32.8%.
Bear Case : EHC
No major red flags identified for EHC, but monitor valuation.
Bear Case : MRK
The primary concerns for MRK are Piotroski F-Score, PEG Ratio, EPS Growth.
Key Dynamics to Monitor
EHC carries more volatility with a beta of 0.60 — expect wider price swings.
EHC is growing revenue faster at 9.9% — sustainability is the question.
MRK generates stronger free cash flow (1.8B), providing more financial flexibility.
Monitor MEDICAL CARE FACILITIES industry trends, competitive dynamics, and regulatory changes.
Bottom Line
EHC scores higher overall (70/100 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.
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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