At a glance
Encompass Health Corp is worth $12.04B, about 22 times its fiscal 2025 earnings. Revenue grew 10.5% to $5.94B in fiscal 2025, with 9.5% kept as profit; over 5 years it has grown 10.7% a year. It pays a 0.64% dividend yield, and returned $594.6M to shareholders in dividends and buybacks over FY2021–FY2025. The stock returned −2.6% over the past year with dividends reinvested and +20.1% a year over five years, against +11.5% and +11.7% for the S&P 500. At its worst it fell 39.5% in the 2020 crash (S&P 500: 33.7%) and 27.3% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 6 months after the lows.
The business in plain English
Encompass Health, formerly HealthSouth, is the largest owner and operator of inpatient rehabilitation hospitals in the US, measured by patients treated, revenue and number of hospitals. These hospitals provide intensive therapy to people recovering from a major injury or illness, such as a stroke, hip fracture or neurological condition. As of December 31, 2025, the company ran 173 hospitals with 11,465 licensed beds in 39 states and Puerto Rico, with concentrations in Florida and Texas.
Nearly all patients (92%) arrive from acute-care hospitals after a doctor's referral. Acute-care hospitals are the regular hospitals that treat the first illness or injury. A substantial portion of Encompass Health's revenue comes from Medicare, the federal health program for older Americans. The company also bills Medicare Advantage plans, which are private insurers that offer Medicare benefits. In 2025, net operating revenues were $5.94 billion: $5.76 billion from inpatient care and $179 million from other sources.
Growth comes from building new hospitals and adding beds to existing ones. Discharges rose from 229,480 in 2023 to 263,299 in 2025. More than a third of its hospitals are joint ventures with acute-care hospitals or health systems. The main drawbacks are its dependence on Medicare payment rules and competition from rehab units run by acute-care hospitals, the same type of hospital that refers most of its patients.
Price history
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EHC -2.6% over the year to Oct 28, 2026, total return with dividends reinvested.
Latest results
- In Q2 FY2026 (ended Jun 30, 2026), revenue was $1.60B, up 9.6% from a year earlier, and net income was $153.9M (+8.3%).
- For fiscal 2025, revenue was $5.94B (+10.5% year over year; +10.7% a year from FY2020 to FY2025) with a 9.5% net margin.
Financial health check
| Revenue growth a year (FY2020–FY2025) | +10.7% good |
|---|---|
| Free cash flow margin | 7.4% watch |
| Return on equity (FY2025) | 23.2% good |
| Return on assets (FY2025) | 8% good |
| Net cash (cash minus debt) | $-2.53B weak |
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2020 | $3.57B | $284.2M | $311.9M |
| FY2021 | $4.01B | $412.2M | $191.2M |
| FY2022 | $4.35B | $271.0M | $141.0M |
| FY2023 | $4.80B | $352.0M | $267.7M |
| FY2024 | $5.37B | $455.7M | $360.3M |
| FY2025 | $5.94B | $566.2M | $439.2M |
Valuation snapshot
| Market value | $12.04B |
|---|---|
| P/E ratio | 22 |
| Dividend yield | 0.64% |
Rank among 1514 US companies
Market value at each year end
Encompass Health’s market value went from $4.86B at the end of 2017 to $12.04B on Oct 28, 2026, about 2.5 times as much; since the end of 2025 it is up 13%.
Show as a table
| Year end | Market value | Change |
|---|---|---|
| Oct 28, 2026 | $12.04B | +12.8% |
| 2025 | $10.68B | +14.8% |
| 2024 | $9.30B | +39.1% |
| 2023 | $6.69B | +12.1% |
| 2022 | $5.97B | -8.1% |
| 2021 | $6.49B | -21.0% |
| 2020 | $8.22B | +20.4% |
| 2019 | $6.83B | +11.9% |
| 2018 | $6.10B | +25.7% |
| 2017 | $4.86B |
Price behavior
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | |
|---|---|---|---|---|---|
| EHC price data to Oct 28, 2026 | +15.9% | -2.6% | +27.0% | +20.1% | — |
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | +15.9% |
| 2025 | +15.7% |
| 2024 | +39.2% |
| 2023 | +12.6% |
| 2022 | +15.8% |
| 2021 | -19.9% |
| 2020 | +21.4% |
| 2019 | +14.2% |
| 2018 | +26.9% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 39.5% over that stretch · deepest drop along the way 39.5%, back to its old high 8.1 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 11.8% over that stretch · deepest drop along the way 27.3%, back to its old high 6.1 months after the low |
Insider activity
Form 4 filings from 2025-10-29 to 2026-10-29 (25 read): 0 open-market purchases and 9 sales ($29.5M).
| Date | Insider | Type | Value |
|---|---|---|---|
| Aug 10, 2026 | Mark J Tarr President & CEO, Director | sell | $21.5M |
| May 15, 2026 | Douglas E Coltharp EVP & Chief Financial Officer | sell | $3.0M |
| Aug 10, 2026 | Douglas E Coltharp EVP & Chief Financial Officer | sell | $2.4M |
| Aug 10, 2026 | John Patrick Darby EVP, Gen Counsel & Secretary | sell | $1.1M |
| Aug 31, 2026 | Andrew L Price Chief Accounting Officer | sell | $630K |
Who owns it
Large shareholders (13G filings)
| Vanguard Capital Management | 5.26% | Mar 31, 2026 |
| T. Rowe Price Associates, Inc. | 5.1% | Jun 30, 2026 |
| Vanguard Portfolio Management | 4.97% | Jun 30, 2026 |
| Invesco Ltd. | 4.9% | Dec 31, 2025 |
| Wellington Management Group LLP | 4% | Dec 31, 2024 |
ETFs with the most weight in EHC
| GLRY Inspire Momentum ETF | 3.12% |
| SSPX Janus Henderson U.S. Sustainable Equity ETF | 2.69% |
| PJFM PGIM Jennison Focused Mid-Cap ETF | 2.44% |
| OUSM ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF | 2.37% |
| OSCV Opus Small Cap Value ETF | 2.13% |
| XHS SPDR S&P Health Care Services ETF | 2.06% |
| JPSV JPMorgan Active Small Cap Value ETF | 1.91% |
| BUYO KraneShares Man Buyout Beta Index ETF | 1.66% |
What could go wrong
- Heavy reliance on Medicare payment rates. Medicare supplies a substantial share of revenue, and the government resets its rates yearly. Increases can lag rising costs, and an automatic 2% cut called sequestration runs into fiscal 2033 unless Congress changes it.
- Referral sources can also be competitors. Its main rivals are rehab units inside acute-care hospitals, which also supply about 92% of its patients. Losing those referral relationships could slow growth and hurt profits.
- Audits and denied claims can delay cash. Government contractors audit Medicare claims and may deny payment, sometimes using statistical sampling to project errors across many claims. Appeals can take a long time, delaying or reducing payment for care already given.
- Insurers may push payments lower. Private insurers, including Medicare Advantage plans, and other groups that manage patient care may push to cut provider payments. A shift toward lower-paying insurers could also reduce revenue and profits.
- Nurse and therapist shortages can raise costs. The hospitals depend on skilled nurses and therapists. Competition for staff, worker shortages, union activity and minimum-wage or overtime rules can push labor costs higher and squeeze profits.
- Whistleblower lawsuits and compliance penalties. The company faces various lawsuits and possible qui tam cases, in which a private whistleblower sues on the government's behalf over alleged false claims. Losing them, or breaking healthcare rules, could mean large penalties.
Recent events
- Quarterly results released; Investor presentation or announcement
- Other company announcement
- Quarterly results released; Investor presentation or announcement
- Major agreement signed; New debt or financial obligation
- Major agreement signed; Other company announcement
- Shareholder vote results
- Quarterly results released; Investor presentation or announcement
- Major agreement signed; Major agreement ended; New debt or financial obligation
- Quarterly results released; Investor presentation or announcement
- Executive or board change
For income and retirement investors
Encompass Health pays a small dividend: the yield was 0.64% as of October 28, 2026. Dividends per share were $1.12 in 2020 and 2021, fell to $0.60 by 2023, then rose to $0.64 in 2024 and $0.72 in 2025, a two-year streak of increases. The 2025 dividend used about 13% of earnings and 16% of free cash flow (cash left after running the business and paying for buildings and equipment). That leaves room for increases, but the income is modest. Buybacks rose to $158 million in 2025, though the share count fell just 0.8% between October 2021 and July 2026.
In the 2020 COVID crash, the shares fell 39.5% and took about eight months to recover. In the 2022 bear market (a broad decline of 20% or more), they dropped 27.3% between April and June but regained their peak by late December. A single stock carries more risk than a diversified fund that spreads money across many companies.
Questions investors ask
How does Encompass Health make money?
Encompass Health makes money by running inpatient rehabilitation hospitals. Patients recovering from strokes, hip fractures and other serious conditions get intensive therapy there. A substantial portion of its revenue comes from Medicare. Medicare Advantage plans and other payors cover much of the rest. In 2025, net operating revenues were $5.94 billion, and $5.76 billion of that came from inpatient care. As of December 31, 2025, it operated 173 hospitals in 39 states and Puerto Rico.
Does Encompass Health pay a dividend?
Yes. Encompass Health paid $0.72 per share in regular dividends for fiscal 2025, up from $0.64 in 2024 and $0.60 in 2023. That makes two yearly increases in a row. The payout is still below the $1.12 paid in 2020 and 2021, an average decline of 8.5% a year from FY2020 to FY2025. The yield was 0.64% as of October 28, 2026. Dividends used 12.6% of 2025 net income.
How much does Encompass Health depend on Medicare?
Heavily. The company gets a substantial portion of its net operating revenues from Medicare, so federal payment rules matter a great deal to its results. Each year Medicare raises rates through a "market basket update" meant to cover rising costs. The law trims that raise with a productivity adjustment, which has typically cut it by 20 to 100 basis points (a basis point is one-hundredth of a percentage point). A 2% automatic cut called sequestration also applies through the first five months of fiscal year 2033 unless it is changed.
How much debt does Encompass Health have?
Encompass Health had $2.63 billion of total debt as of June 30, 2026, against $107.7 million of cash and investments and $2.60 billion of shareholders' equity. The company says most of its debt is long-dated and fixed-rate. As of December 31, 2025, it had no significant maturities until 2028. It also had $824 million available on a $1 billion revolving credit facility, which is a pre-arranged line of credit. It owned about 79% of its hospital real estate.
How has Encompass Health stock performed?
Well over three and five years, less well over the latest year. As of October 28, 2026, the share price had gained 20.1% a year over five years (150% in total) and 27% a year over three years. Over one year it had lost 2.6%. The ride has been bumpy. The stock fell 39.5% in the 2020 COVID crash and took about eight months to recover. In the year to October 28, 2026, it fell as much as 26.1% from a peak.