Why NYSE:HRB is a Top Pick for Dividend Investors.

Unearth the potential of H&R BLOCK INC (NYSE:HRB) as a dividend stock recommended by our stock screening tool. NYSE:HRB maintains a robust financial footing and delivers a sustainable dividend. We'll delve into the details below.

Understanding NYSE:HRB's Dividend

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:HRB was assigned a score of 7 for dividend:

• Compared to an average industry Dividend Yield of 544.90, HRB pays a better dividend. On top of this HRB pays more dividend than 89.06% of the companies listed in the same industry.
• HRB has paid a dividend for at least 10 years, which is a reliable track record.
• HRB has not decreased their dividend for at least 10 years, which is a reliable track record.
• The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.

Assessing Health Metrics for NYSE:HRB

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:HRB has earned a 7 out of 10:

• An Altman-Z score of 3.57 indicates that HRB is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.57, HRB belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
• HRB has a debt to FCF ratio of 2.27. This is a good value and a sign of high solvency as HRB would need 2.27 years to pay back of all of its debts.
• The Debt to FCF ratio of HRB (2.27) is better than 75.00% of its industry peers.
• Although HRB does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

Looking at the Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:HRB scores a 8 out of 10:

• The Return On Assets of HRB (13.33%) is better than 90.63% of its industry peers.
• HRB has a better Return On Equity (473.79%) than 100.00% of its industry peers.
• With an excellent Return On Invested Capital value of 21.03%, HRB belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 11.90%.
• The 3 year average ROIC (27.24%) for HRB is well above the current ROIC(21.03%). The reason for the recent decline needs to be investigated.
• Looking at the Profit Margin, with a value of 11.31%, HRB belongs to the top of the industry, outperforming 82.81% of the companies in the same industry.
• HRB's Profit Margin has improved in the last couple of years.
• HRB has a Operating Margin of 15.79%. This is in the better half of the industry: HRB outperforms 79.69% of its industry peers.
• HRB's Operating Margin has improved in the last couple of years.

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For an up to date full fundamental analysis you can check the fundamental report of HRB

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.