Investors should take notice of NYSE:HRB—it offers a great deal for the fundamentals it presents.

Consider H&R BLOCK INC (NYSE:HRB) as a top value stock, identified by our stock screening tool. NYSE:HRB shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Assessing Valuation Metrics for NYSE:HRB

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:HRB was assigned a score of 8 for valuation:

• Based on the Price/Earnings ratio, HRB is valued cheaper than 85.94% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 28.76. HRB is valued rather cheaply when compared to this.
• HRB is valuated reasonably with a Price/Forward Earnings ratio of 11.76.
• Based on the Price/Forward Earnings ratio, HRB is valued cheaper than 89.06% of the companies in the same industry.
• HRB is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.90, which is the current average of the S&P500 Index.
• 65.63% of the companies in the same industry are more expensive than HRB, based on the Enterprise Value to EBITDA ratio.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 87.50% of the companies listed in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of HRB may justify a higher PE ratio.

Profitability Analysis for NYSE:HRB

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:HRB was assigned a score of 8 for profitability:

• Looking at the Return On Assets, with a value of 13.33%, HRB belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
• The Return On Equity of HRB (473.79%) is better than 100.00% of its industry peers.
• The Return On Invested Capital of HRB (21.03%) is better than 92.19% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 12.23%.
• 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.
• The Profit Margin of HRB (11.31%) is better than 81.25% of its industry peers.
• In the last couple of years the Profit Margin of HRB has grown nicely.
• 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.
• In the last couple of years the Operating Margin of HRB has grown nicely.

A Closer Look at Health for NYSE:HRB

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:HRB, the assigned 7 for health provides valuable insights:

• An Altman-Z score of 3.55 indicates that HRB is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 3.55, HRB is doing good in the industry, outperforming 79.69% 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.
• HRB's Debt to FCF ratio of 2.27 is fine compared to the rest of the industry. HRB outperforms 76.56% 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.

Assessing Growth for NYSE:HRB

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:HRB has received a 4 out of 10:

• HRB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.94%, which is quite good.
• The Earnings Per Share has been growing by 15.54% on average over the past years. This is quite good.
• Looking at the last year, HRB shows a quite strong growth in Revenue. The Revenue has grown by 9.28% in the last year.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of HRB contains the most current fundamental analsysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.