Encompass Health Corporation vs Sotera Health Co, two Medical Care stocks. A side-by-side on valuation, growth, margins, returns, and what each price is betting.
What is priced in: Sotera at 42.4 times earnings needs its sterilization moat to outrun 3.46 turns of debt; Encompass at 16.9 times needs inpatient rehab demand to keep filling hospitals it is still building. The economics run closer than the multiples, net margins of 9.9% and 10%, returns on equity of 18.9% and 18.4%, near mirrors. The differences are structural: Sotera's 52.5% gross margin niche against Encompass' operational model, Sotera's thin 1.9% free-cash yield against Encompass' construction-driven negative 7.2%. Twenty-five turns of premium for the moat over the operator, with neither currently paying cash for the wait; the pair prices patience twice, at very different rates.
Comparison updated 2026-07-10.
| Metric | EHC | SHC |
|---|---|---|
| Price | $101.30 | $17.38 |
| Market cap | $10.2B | $5.0B |
| Sector | Medical Care | Medical Care |
| Stage | Mature | Mature |
| Implied growth (priced in) | +8.8% | +15.4% |
| P/E | 16.9 | 42.4 |
| P/B | 3.08 | 8.03 |
| P/S | 1.68 | 4.20 |
| EV/EBITDA | 37.7 | 271.2 |
| Revenue growth | +10.1% | +7.5% |
| Gross margin | — | 52.5% |
| Net margin | 10.0% | 9.9% |
| Return on equity | 18.4% | 18.9% |
| Return on assets | 8.3% | 3.6% |
| FCF yield | -7.2% | 1.9% |
| Dividend yield | 0.7% | — |
| Debt / equity | 0.78 | 3.46 |
| Current ratio | 1.17 | 2.82 |
| Altman Z (solvency) | 2.40 | 1.44 |
| Piotroski F (quality) | 5 / 9 | 4 / 9 |
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The stronger value is highlighted per metric where one is strictly better on that single number; it is not an overall verdict on either company. For informational and research purposes only. Not investment advice. Not a recommendation to buy, sell, or hold any security. boothcheck is not a registered investment adviser. Past performance does not guarantee future results.