H&R BLOCK INC (HRB) Stock Fundamental Analysis
NYSE:HRB - New York Stock Exchange, Inc. - US0936711052 - Common Stock - Currency: USD
HRB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 71 industry peers in the Diversified Consumer Services industry. HRB has an excellent profitability rating, but there are some minor concerns on its financial health. HRB scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally HRB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HRB had positive earnings in the past year.
In the past year HRB had a positive cash flow from operations.
Of the past 5 years HRB 4 years were profitable.
In the past 5 years HRB always reported a positive cash flow from operatings.
1.2 Ratios
HRB has a better Return On Assets (19.48%) than 95.31% of its industry peers.
With an excellent Return On Invested Capital value of 36.07%, HRB belongs to the best of the industry, outperforming 96.88% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HRB is significantly above the industry average of 11.57%.
The last Return On Invested Capital (36.07%) for HRB is above the 3 year average (27.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.48% | ||
| ROE | N/A | ||
| ROIC | 36.07% |
ROA(3y)17.74%
ROA(5y)13.8%
ROE(3y)877.58%
ROE(5y)557.23%
ROIC(3y)27.24%
ROIC(5y)22.03%
1.3 Margins
Looking at the Profit Margin, with a value of 14.59%, HRB belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
HRB's Profit Margin has improved in the last couple of years.
The Operating Margin of HRB (20.92%) is better than 87.50% of its industry peers.
HRB's Operating Margin has improved in the last couple of years.
HRB's Gross Margin of 44.31% is in line compared to the rest of the industry. HRB outperforms 46.88% of its industry peers.
In the last couple of years the Gross Margin of HRB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.92% | ||
| PM (TTM) | 14.59% | ||
| GM | 44.31% |
OM growth 3Y-0.35%
OM growth 5Y2.31%
PM growth 3Y-1.2%
PM growth 5Y3.82%
GM growth 3Y-0.88%
GM growth 5Y0.73%
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
HRB has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.88 indicates that HRB is not a great score, but indicates only limited risk for bankruptcy at the moment.
HRB has a better Altman-Z score (2.88) than 71.88% of its industry peers.
The Debt to FCF ratio of HRB is 3.32, which is a good value as it means it would take HRB, 3.32 years of fcf income to pay off all of its debts.
HRB's Debt to FCF ratio of 3.32 is fine compared to the rest of the industry. HRB outperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.32 | ||
| Altman-Z | 2.88 |
ROIC/WACC3.62
WACC9.96%
2.3 Liquidity
A Current Ratio of 0.73 indicates that HRB may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.73, HRB is doing worse than 71.88% of the companies in the same industry.
HRB has a Quick Ratio of 0.73. 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 0.73, HRB is not doing good in the industry: 67.19% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
HRB shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.00%.
The Earnings Per Share has been growing by 15.54% on average over the past years. This is quite good.
HRB shows a decrease in Revenue. In the last year, the revenue decreased by -1.42%.
HRB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.13% yearly.
EPS 1Y (TTM)0%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%-36.22%
Revenue 1Y (TTM)-1.42%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%-0.01%
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 9.17% yearly.
Based on estimates for the next years, HRB will show a small growth in Revenue. The Revenue will grow by 2.77% on average per year.
EPS Next Y18.19%
EPS Next 2Y7.47%
EPS Next 3Y9.17%
EPS Next 5YN/A
Revenue Next Year4.02%
Revenue Next 2Y3.4%
Revenue Next 3Y2.77%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.64, the valuation of HRB can be described as correct.
Based on the Price/Earnings ratio, HRB is valued a bit cheaper than the industry average as 76.56% of the companies are valued more expensively.
HRB is valuated cheaply when we compare the Price/Earnings ratio to 29.75, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.29 indicates a reasonable valuation of HRB.
Based on the Price/Forward Earnings ratio, HRB is valued cheaper than 92.19% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HRB to the average of the S&P500 Index (22.44), we can say HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 10.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HRB indicates a somewhat cheap valuation: HRB is cheaper than 70.31% of the companies listed in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.44 | ||
| EV/EBITDA | 10.56 |
4.3 Compensation for Growth
HRB's 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.
PEG (NY)0.75
PEG (5Y)0.88
EPS Next 2Y7.47%
EPS Next 3Y9.17%
5. Dividend
5.1 Amount
HRB has a Yearly Dividend Yield of 2.81%. Purely for dividend investing, there may be better candidates out there.
HRB's Dividend Yield is rather good when compared to the industry average which is at 4.60. HRB pays more dividend than 93.75% of the companies in the same industry.
HRB's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
5.2 History
The dividend of HRB has a limited annual growth rate of 4.72%.
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.
Dividend Growth(5Y)4.72%
Div Incr Years9
Div Non Decr Years27
5.3 Sustainability
35.38% of the earnings are spent on dividend by HRB. This is a low number and sustainable payout ratio.
HRB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP35.38%
EPS Next 2Y7.47%
EPS Next 3Y9.17%
53.61
-0.9 (-1.65%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.74%
Inst Owner Change1.8%
Ins Owners1.14%
Ins Owner Change0.13%
Market Cap7.18B
Analysts77.5
Price Target63.58 (18.6%)
Short Float %10.38%
Short Ratio11.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
Yearly Dividend1.26
Dividend Growth(5Y)4.72%
DP35.38%
Div Incr Years9
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.86%
Min EPS beat(2)-7.56%
Max EPS beat(2)1.83%
EPS beat(4)3
Avg EPS beat(4)1.91%
Min EPS beat(4)-7.56%
Max EPS beat(4)7.39%
EPS beat(8)6
Avg EPS beat(8)4.47%
EPS beat(12)10
Avg EPS beat(12)6.34%
EPS beat(16)12
Avg EPS beat(16)7.03%
Revenue beat(2)1
Avg Revenue beat(2)-0.74%
Min Revenue beat(2)-3.34%
Max Revenue beat(2)1.86%
Revenue beat(4)3
Avg Revenue beat(4)0.52%
Min Revenue beat(4)-3.34%
Max Revenue beat(4)2.37%
Revenue beat(8)5
Avg Revenue beat(8)0.78%
Revenue beat(12)8
Avg Revenue beat(12)2.04%
Revenue beat(16)11
Avg Revenue beat(16)2.92%
PT rev (1m)-0.53%
PT rev (3m)-0.53%
EPS NQ rev (1m)-3.09%
EPS NQ rev (3m)-3.09%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-0.24%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 10.29 | ||
| P/S | 1.98 | ||
| P/FCF | 10.44 | ||
| P/OCF | 9.35 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.56 |
EPS(TTM)3.93
EY7.33%
EPS(NY)5.21
Fwd EY9.72%
FCF(TTM)5.13
FCFY9.58%
OCF(TTM)5.73
OCFY10.69%
SpS27.05
BVpS-6.52
TBVpS-14.39
PEG (NY)0.75
PEG (5Y)0.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.48% | ||
| ROE | N/A | ||
| ROCE | 45.82% | ||
| ROIC | 36.07% | ||
| ROICexc | 44.73% | ||
| ROICexgc | 213.68% | ||
| OM | 20.92% | ||
| PM (TTM) | 14.59% | ||
| GM | 44.31% | ||
| FCFM | 18.98% |
ROA(3y)17.74%
ROA(5y)13.8%
ROE(3y)877.58%
ROE(5y)557.23%
ROIC(3y)27.24%
ROIC(5y)22.03%
ROICexc(3y)49.03%
ROICexc(5y)40.5%
ROICexgc(3y)423.16%
ROICexgc(5y)N/A
ROCE(3y)34.61%
ROCE(5y)27.98%
ROICexcg growth 3Y48.94%
ROICexcg growth 5YN/A
ROICexc growth 3Y11.08%
ROICexc growth 5Y-2.4%
OM growth 3Y-0.35%
OM growth 5Y2.31%
PM growth 3Y-1.2%
PM growth 5Y3.82%
GM growth 3Y-0.88%
GM growth 5Y0.73%
F-Score8
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.32 | ||
| Debt/EBITDA | 2.2 | ||
| Cap/Depr | 67.03% | ||
| Cap/Sales | 2.21% | ||
| Interest Coverage | 10.29 | ||
| Cash Conversion | 87.51% | ||
| Profit Quality | 130.11% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 2.88 |
F-Score8
WACC9.96%
ROIC/WACC3.62
Cap/Depr(3y)49.77%
Cap/Depr(5y)46.23%
Cap/Sales(3y)1.85%
Cap/Sales(5y)2.04%
Profit Quality(3y)127.56%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%-36.22%
EPS Next Y18.19%
EPS Next 2Y7.47%
EPS Next 3Y9.17%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.42%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%-0.01%
Revenue Next Year4.02%
Revenue Next 2Y3.4%
Revenue Next 3Y2.77%
Revenue Next 5YN/A
EBIT growth 1Y35.03%
EBIT growth 3Y1.52%
EBIT growth 5Y5.51%
EBIT Next Year12.42%
EBIT Next 3Y5.54%
EBIT Next 5YN/A
FCF growth 1Y-21.67%
FCF growth 3Y4.67%
FCF growth 5Y5.16%
OCF growth 1Y-18.5%
OCF growth 3Y4.82%
OCF growth 5Y3.52%