H&R BLOCK INC (HRB)
US0936711052 - Common Stock
Taking everything into account, HRB scores 6 out of 10 in our fundamental rating. HRB was compared to 67 industry peers in the Diversified Consumer Services industry. HRB scores excellent on profitability, but there are some minor concerns on its financial health. HRB is valued quite cheap, while showing a decent growth score. This is a good combination! Finally HRB also has an excellent dividend rating. These ratings could make HRB a good candidate for value and dividend investing.
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.
HRB had positive earnings in 4 of the past 5 years.
HRB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HRB's Return On Assets of 16.49% is amongst the best of the industry. HRB outperforms 90.77% of its industry peers.
Looking at the Return On Invested Capital, with a value of 25.89%, HRB belongs to the top of the industry, outperforming 95.38% 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 12.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | N/A | ||
| ROIC | 25.89% |
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
With a decent Profit Margin value of 11.05%, HRB is doing good in the industry, outperforming 80.00% of the companies in the same industry.
HRB's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.17%, HRB is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Operating Margin of HRB has grown nicely.
HRB's Gross Margin of 40.56% is on the low side compared to the rest of the industry. HRB is outperformed by 60.00% of its industry peers.
HRB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.17% | ||
| PM (TTM) | 11.05% | ||
| GM | 40.56% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HRB is creating value.
HRB has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HRB has been reduced compared to 5 years ago.
Compared to 1 year ago, HRB has an improved debt to assets ratio.
2.2 Solvency
HRB has an Altman-Z score of 3.56. This indicates that HRB is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.56, HRB is in the better half of the industry, outperforming 78.46% 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.
Looking at the Debt to FCF ratio, with a value of 2.27, HRB is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 3.56 |
ROIC/WACC3.13
WACC8.27%
2.3 Liquidity
HRB has a Current Ratio of 0.77. This is a bad value and indicates that HRB is not financially healthy enough and could expect problems in meeting its short term obligations.
HRB has a worse Current ratio (0.77) than 69.23% of its industry peers.
A Quick Ratio of 0.77 indicates that HRB may have some problems paying its short term obligations.
HRB has a Quick ratio of 0.77. This is in the lower half of the industry: HRB underperforms 67.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.62% over the past year.
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 9.44% in the last year.
The Revenue has been growing slightly by 3.13% on average over the past years.
EPS 1Y (TTM)14.62%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%-11.43%
Revenue 1Y (TTM)9.44%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%5.45%
3.2 Future
Based on estimates for the next years, HRB will show a small growth in Earnings Per Share. The EPS will grow by 7.52% on average per year.
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 Y17.85%
EPS Next 2Y7.11%
EPS Next 3Y7.52%
EPS Next 5YN/A
Revenue Next Year3.99%
Revenue Next 2Y3.31%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.28, HRB is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 83.08% of the companies listed in the same industry.
HRB is valuated cheaply when we compare the Price/Earnings ratio to 29.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 11.27, the valuation of HRB can be described as reasonable.
Based on the Price/Forward Earnings ratio, HRB is valued cheaper than 90.77% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.00, HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.28 | ||
| Fwd PE | 11.27 |
4.2 Price Multiples
63.08% 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 87.69% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.15 | ||
| EV/EBITDA | 13 |
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 decent profitability rating of HRB may justify a higher PE ratio.
PEG (NY)0.74
PEG (5Y)0.85
EPS Next 2Y7.11%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
HRB has a Yearly Dividend Yield of 2.64%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 277.85, HRB pays a better dividend. On top of this HRB pays more dividend than 92.31% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.21, HRB has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
5.2 History
The dividend of HRB has a limited annual growth rate of 4.72%.
HRB has been paying a dividend for at least 10 years, so it has a reliable track record.
HRB has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.72%
Div Incr Years8
Div Non Decr Years26
5.3 Sustainability
43.15% of the earnings are spent on dividend by HRB. This is a bit on the high side, but may be sustainable.
The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP43.15%
EPS Next 2Y7.11%
EPS Next 3Y7.52%
H&R BLOCK INC
NYSE:HRB (11/22/2024, 8:04:00 PM)
After market: 58.3 0 (0%)58.3
+1.43 (+2.51%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.99B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.28 | ||
| Fwd PE | 11.27 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.74
PEG (5Y)0.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.17% | ||
| PM (TTM) | 11.05% | ||
| GM | 40.56% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)14.62%
EPS 3Y9.34%
EPS 5Y
EPS Q2Q%
EPS Next Y17.85%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.44%
Revenue growth 3Y1.88%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y