Ethic and Braun Stacey Acquire 28,984 Encompass Health Shares Valued at $29.68M
Ethic Inc. acquired a new 10,017-share stake in Encompass Health in the third quarter, investing roughly $1.27 million. Braun Stacey Associates increased its Encompass Health stake by 9.3%, adding 18,967 shares to hold 223,673 shares valued at $28.41 million at quarter-end.
1. Ethic Inc. Initiates New Position in Encompass Health
In the third quarter, Ethic Inc. acquired 10,017 shares of Encompass Health Corporation, representing an investment valued at approximately $1.27 million. This marks Ethic’s first disclosed position in the post-acute care provider, as reported in its most recent Form 13F filing with the SEC. The purchase underscores growing institutional interest in Encompass Health’s network of inpatient rehabilitation hospitals and home health and hospice services across more than 30 states.
2. Broader Institutional Ownership Trends
Encompass Health remains predominantly institutionally held, with 97.25% of its shares owned by hedge funds and other large investors. In the second quarter, Newbridge Financial Services Group increased its stake by 112.5%, adding 225 shares for a total holding of 425 shares. Parkside Financial Bank & Trust boosted its position by 179.5% to 478 shares, while Employees Retirement System of Texas and Park Place Capital established new positions valued at approximately $57,000 and $72,000, respectively. Notably, TD Waterhouse Canada expanded its holding by 680 shares, a 68,000% increase, reflecting broad confidence in the company’s growth outlook.
3. Consensus Analyst Ratings Point to Continued Upside
Among 11 research firms covering Encompass Health, two have issued Strong Buy ratings and eight have given Buy recommendations, with one Hold. UBS Group and Barclays both raised their assessments in October, while Raymond James and Wall Street Zen also upgraded shares later in the fourth quarter. KeyCorp reaffirmed an Overweight stance in September. Analysts cited Encompass Health’s stable cash flows, diversified service lines and market leadership in post-acute care as drivers for their positive outlook.
4. Recent Financial Performance and Dividend Policy
In its latest quarter, Encompass Health reported revenue of $136.3 million and earnings of $0.93 per share, translating into a net margin of 9.33% and a return on equity of 17.84%. The company reaffirmed full-year guidance of $3.83 to $4.19 in earnings per share. On the capital return front, Encompass Health declared a quarterly dividend of $0.19 per share, corresponding to a 14.37% payout ratio and an annualized yield of approximately 0.7%, with an upcoming payment scheduled for January 15.