Encompass Health (NYSE:EHC) Shares Gap Up After Dividend Announcement

Key Points

• Encompass Health shares jumped before trading after the company announced a higher quarterly dividend, opening at $115.00 versus the prior close of $111.06 and last trading up about 4.1%.
• The new dividend is $0.21 per share, payable on October 15 to shareholders of record on October 1. That raises the annualized dividend to $0.84 and nudges the yield to about 0.7%.
• Analyst sentiment remains broadly positive, with an average “Moderate Buy” rating and a consensus price target of $143.86, even though some firms recently trimmed their targets.

Shares of Encompass Health Corporation (NYSE:EHC - Get Free Report) gapped up prior to trading on Friday following a dividend announcement from the company. The stock had previously closed at $111.06, but opened at $115.00. Encompass Health shares last traded at $115.2860, with a volume of 61,176 shares traded. The newly announced dividend which will be paid on Thursday, October 15th. Stockholders of record on Thursday, October 1st will be paid a $0.21 dividend. This represents a $0.84 annualized dividend and a dividend yield of 0.7%. This is an increase from Encompass Health's previous quarterly dividend of $0.19. The ex-dividend date of this dividend is Thursday, October 1st. Encompass Health's dividend payout ratio is 12.69%.

Analysts Set New Price Targets

EHC has been the topic of a number of analyst reports. Barclays lowered their price objective on Encompass Health from $153.00 to $140.00 and set an "overweight" rating on the stock in a research report on Tuesday, May 5th. Weiss Ratings lowered shares of Encompass Health from a "buy (b-)" rating to a "hold (c+)" rating in a report on Friday, June 26th. Wall Street Zen upgraded shares of Encompass Health from a "hold" rating to a "buy" rating in a research note on Saturday, May 2nd. TD Cowen started coverage on shares of Encompass Health in a report on Thursday, May 28th. They set a "buy" rating and a $125.00 price target on the stock. Finally, Leerink Partners set a $152.00 price target on shares of Encompass Health in a research report on Friday, May 22nd. One analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating and two have issued a Hold rating to the company's stock. According to data from MarketBeat, Encompass Health presently has an average rating of "Moderate Buy" and an average price target of $143.86.

Encompass Health Stock Up 4.1%

The company has a 50-day moving average price of $104.85 and a 200 day moving average price of $103.74. The firm has a market capitalization of $11.47 billion, a PE ratio of 19.32, a P/E/G ratio of 2.42 and a beta of 0.74. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.17 and a quick ratio of 1.17.

Encompass Health (NYSE:EHC - Get Free Report) last released its earnings results on Thursday, April 30th. The company reported $1.60 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.51 by $0.09. Encompass Health had a return on equity of 18.28% and a net margin of 10.04%.The firm had revenue of $1.59 billion during the quarter, compared to analysts' expectations of $1.57 billion. During the same quarter last year, the business posted $1.37 earnings per share. The firm's revenue was up 9.0% on a year-over-year basis. Encompass Health has set its FY 2026 guidance at 5.890-6.110 EPS. Analysts forecast that Encompass Health Corporation will post 5.96 earnings per share for the current year.

Insider Activity

In other news, EVP Patrick William Tuer sold 682 shares of Encompass Health stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $104.56, for a total transaction of $71,309.92. Following the sale, the executive vice president owned 24,755 shares in the company, valued at $2,588,382.80. This trade represents a 2.68% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. 1.80% of the stock is currently owned by insiders.

Institutional Trading of Encompass Health

Institutional investors and hedge funds have recently bought and sold shares of the stock. WPG Advisers LLC boosted its holdings in shares of Encompass Health by 73.3% during the 4th quarter. WPG Advisers LLC now owns 324 shares of the company's stock valued at $34,000 after purchasing an additional 137 shares during the last quarter. Flagship Harbor Advisors LLC bought a new stake in shares of Encompass Health in the fourth quarter worth about $37,000. Assetmark Inc. lifted its position in shares of Encompass Health by 89.6% in the first quarter. Assetmark Inc. now owns 455 shares of the company's stock worth $44,000 after buying an additional 215 shares in the last quarter. Caitong International Asset Management Co. Ltd lifted its position in shares of Encompass Health by 36,200.0% in the third quarter. Caitong International Asset Management Co. Ltd now owns 363 shares of the company's stock worth $46,000 after buying an additional 362 shares in the last quarter. Finally, Aster Capital Management DIFC Ltd bought a new position in Encompass Health during the fourth quarter valued at approximately $55,000. 97.25% of the stock is currently owned by institutional investors.

About Encompass Health

Encompass Health Corporation is a leading provider of post‐acute healthcare services in the United States, operating a comprehensive network of inpatient rehabilitation hospitals and home health and hospice agencies. Its inpatient rehabilitation hospitals offer intensive therapy programs for patients recovering from conditions such as stroke, brain injury, spinal cord injury, cardiac and pulmonary disorders, and orthopedic procedures. Through its home health segment, Encompass Health delivers skilled nursing, physical therapy, occupational therapy and speech therapy to patients in the comfort of their homes, while its hospice services provide end‐of‐life care focused on symptom management and emotional support for patients and families.

Founded in 1984 as HealthSouth Corporation and rebranded as Encompass Health in 2018, the company has grown organically and through acquisitions to serve patients across more than 30 states.

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