H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRB - US0936711052 - Common Stock
40.04 USD
-0.58 (-1.43%)
40.07 USD
+0.03 (+0.07%)
Taking everything into account, HRB scores 6 out of 10 in our fundamental rating. HRB was compared to 76 industry peers in the Diversified Consumer Services industry. While HRB has a great profitability rating, there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on HRB. HRB also has an excellent dividend rating. This makes HRB very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year HRB was profitable.
- HRB had a positive operating cash flow in the past year.
- In the past 5 years HRB has always been profitable.
- Each year in the past 5 years HRB had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 23.16%, HRB belongs to the top of the industry, outperforming 96.05% of the companies in the same industry.
- HRB has a Return On Invested Capital of 35.30%. This is amongst the best in the industry. HRB outperforms 98.68% of its industry peers.
- HRB had an Average Return On Invested Capital over the past 3 years of 29.50%. This is significantly above the industry average of 10.15%.
- The 3 year average ROIC (29.50%) for HRB is below the current ROIC(35.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.16% | ||
| ROE | N/A | ||
| ROIC | 35.3% |
ROA(3y)18.28%
ROA(5y)17.52%
ROE(3y)1016.86%
ROE(5y)695.21%
ROIC(3y)29.5%
ROIC(5y)27.67%
1.3 Margins
- The Profit Margin of HRB (16.10%) is better than 85.53% of its industry peers.
- In the last couple of years the Profit Margin of HRB has remained more or less at the same level.
- HRB's Operating Margin of 22.52% is amongst the best of the industry. HRB outperforms 86.84% of its industry peers.
- In the last couple of years the Operating Margin of HRB has grown nicely.
- The Gross Margin of HRB (44.56%) is comparable to the rest of the industry.
- HRB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.52% | ||
| PM (TTM) | 16.1% | ||
| GM | 44.56% |
OM growth 3Y0.78%
OM growth 5Y25.98%
PM growth 3Y0.25%
PM growth 5YN/A
GM growth 3Y-0.84%
GM growth 5Y4.86%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HRB is creating value.
- Compared to 1 year ago, HRB has less shares outstanding
- Compared to 5 years ago, HRB has less shares outstanding
- Compared to 1 year ago, HRB has an improved debt to assets ratio.
2.2 Solvency
- HRB has an Altman-Z score of 3.07. This indicates that HRB is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 3.07, HRB is doing good in the industry, outperforming 72.37% of the companies in the same industry.
- HRB has a debt to FCF ratio of 3.01. This is a good value and a sign of high solvency as HRB would need 3.01 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 3.01, HRB is doing good in the industry, outperforming 76.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.01 | ||
| Altman-Z | 3.07 |
ROIC/WACC4.55
WACC7.75%
2.3 Liquidity
- A Current Ratio of 0.76 indicates that HRB may have some problems paying its short term obligations.
- With a Current ratio value of 0.76, HRB is not doing good in the industry: 71.05% of the companies in the same industry are doing better.
- HRB has a Quick Ratio of 0.76. This is a bad value and indicates that HRB is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.76, HRB is not doing good in the industry: 67.11% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.52% over the past year.
- Measured over the past years, HRB shows a very strong growth in Earnings Per Share. The EPS has been growing by 43.89% on average per year.
- HRB shows a decrease in Revenue. In the last year, the revenue decreased by -0.88%.
- HRB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.34% yearly.
EPS 1Y (TTM)7.52%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%-2.56%
Revenue 1Y (TTM)-0.88%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%5.03%
3.2 Future
- HRB is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.96% yearly.
- Based on estimates for the next years, HRB will show a small growth in Revenue. The Revenue will grow by 3.32% on average per year.
EPS Next Y5.04%
EPS Next 2Y8.21%
EPS Next 3Y11.96%
EPS Next 5YN/A
Revenue Next Year4.25%
Revenue Next 2Y3.69%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- HRB is valuated reasonably with a Price/Earnings ratio of 8.48.
- HRB's Price/Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 85.53% of the companies in the same industry.
- HRB is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 7.20, the valuation of HRB can be described as very cheap.
- Based on the Price/Forward Earnings ratio, HRB is valued cheaply inside the industry as 94.74% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.48 | ||
| Fwd PE | 7.2 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, HRB is valued a bit cheaper than 78.95% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, HRB is valued cheaper than 93.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.79 | ||
| EV/EBITDA | 6.72 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- HRB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.68
PEG (5Y)0.19
EPS Next 2Y8.21%
EPS Next 3Y11.96%
5. Dividend
5.1 Amount
- HRB has a Yearly Dividend Yield of 4.14%, which is a nice return.
- In the last 3 months the price of HRB has falen by -23.31%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.36, HRB pays a better dividend. On top of this HRB pays more dividend than 100.00% of the companies listed in the same industry.
- HRB's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.14% |
5.2 History
- On average, the dividend of HRB grows each year by 6.79%, which is quite nice.
- HRB has been paying a dividend for at least 10 years, so it has a reliable track record.
- HRB has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.79%
Div Incr Years9
Div Non Decr Years27
5.3 Sustainability
- HRB pays out 33.41% of its income as dividend. This is a sustainable payout ratio.
- The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP33.41%
EPS Next 2Y8.21%
EPS Next 3Y11.96%
H&R BLOCK INC / HRB FAQ
What is the fundamental rating for HRB stock?
ChartMill assigns a fundamental rating of 6 / 10 to HRB.
What is the valuation status for HRB stock?
ChartMill assigns a valuation rating of 8 / 10 to H&R BLOCK INC (HRB). This can be considered as Undervalued.
How profitable is H&R BLOCK INC (HRB) stock?
H&R BLOCK INC (HRB) has a profitability rating of 8 / 10.
Can you provide the financial health for HRB stock?
The financial health rating of H&R BLOCK INC (HRB) is 5 / 10.
Can you provide the expected EPS growth for HRB stock?
The Earnings per Share (EPS) of H&R BLOCK INC (HRB) is expected to grow by 5.04% in the next year.