Comparing Auna (NYSE:AUNA) and Encompass Health (NYSE:EHC)

Encompass Health (NYSE:EHC) and Auna (NYSE:AUNA) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Encompass Health and Auna’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Encompass Health	10.01%	18.08%	8.22%
Auna	0.44%	12.88%	3.24%

Analyst Ratings

This is a summary of recent ratings and price targets for Encompass Health and Auna, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Encompass Health	0	1	5	1	3.00
Auna	1	2	1	1	2.40

Encompass Health presently has a consensus target price of $148.50, suggesting a potential upside of 15.67%. Auna has a consensus target price of $6.97, suggesting a potential upside of 30.71%. Given Auna’s higher possible upside, analysts clearly believe Auna is more favorable than Encompass Health.

Insider and Institutional Ownership

97.3% of Encompass Health shares are held by institutional investors. 1.8% of Encompass Health shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Encompass Health and Auna”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Encompass Health	$6.21 billion	2.04	$566.20 million	$6.14	20.91
Auna	$4.67 billion	0.08	$27.39 million	$0.07	76.14

Encompass Health has higher revenue and earnings than Auna. Encompass Health is trading at a lower price-to-earnings ratio than Auna, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Encompass Health has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Auna has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

Encompass Health beats Auna on 12 of the 14 factors compared between the two stocks.

About Encompass Health

Encompass Health Corporation provides post-acute healthcare services in the United States and Puerto Rico. It owns and operates inpatient rehabilitation hospitals that provide medical, nursing, therapy, and ancillary services. The company provides specialized rehabilitative treatment on an inpatient basis to patients who have experienced physical or cognitive disabilities or injuries due to medical conditions, such as strokes, hip fractures, and various debilitating neurological conditions. It offers services through the Medicare program to federal government, managed care plans and private insurers, state governments, and other patients. The company was formerly known as HealthSouth Corporation and changed its name to Encompass Health Corporation in January 2018. The company was incorporated in 1984 and is based in Birmingham, Alabama.

About Auna

Auna S.A., a healthcare service provider, operates hospitals and clinics in Mexico, Peru, and Colombia. The company provides prepaid healthcare plans in Peru; and dental and vision plans in Mexico. The company was founded in 1989 and is based in Luxembourg, Luxembourg.