H&R BLOCK INC (HRB) Stock Fundamental Analysis
NYSE:HRB - New York Stock Exchange, Inc. - US0936711052 - Common Stock - Currency: USD
Taking everything into account, HRB scores 6 out of 10 in our fundamental rating. HRB was compared to 72 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 is valued quite cheap, but it does not seem to be growing. Finally HRB also has an excellent dividend rating. With these ratings, HRB could be worth investigating further for value and dividend investing!.
1. Profitability
1.1 Basic Checks
HRB had positive earnings in the past year.
HRB had a positive operating cash flow in the past year.
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 (17.23%) than 94.44% of its industry peers.
HRB has a better Return On Invested Capital (38.40%) than 98.61% of its industry peers.
HRB had an Average Return On Invested Capital over the past 3 years of 27.24%. This is significantly above the industry average of 10.64%.
The last Return On Invested Capital (38.40%) for HRB is above the 3 year average (27.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.23% | ||
| ROE | N/A | ||
| ROIC | 38.4% |
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
HRB has a Profit Margin of 15.06%. This is amongst the best in the industry. HRB outperforms 87.50% of its industry peers.
In the last couple of years the Profit Margin of HRB has grown nicely.
HRB has a Operating Margin of 21.75%. This is amongst the best in the industry. HRB outperforms 90.28% of its industry peers.
HRB's Operating Margin has improved in the last couple of years.
HRB has a Gross Margin (44.53%) which is comparable to the rest of the industry.
HRB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.75% | ||
| PM (TTM) | 15.06% | ||
| GM | 44.53% |
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.
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 3.05 indicates that HRB is not in any danger for bankruptcy at the moment.
The Altman-Z score of HRB (3.05) is better than 68.06% of its industry peers.
The Debt to FCF ratio of HRB is 2.30, which is a good value as it means it would take HRB, 2.30 years of fcf income to pay off all of its debts.
HRB has a better Debt to FCF ratio (2.30) than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Altman-Z | 3.05 |
ROIC/WACC4.54
WACC8.46%
2.3 Liquidity
HRB has a Current Ratio of 0.78. 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 (0.78) than 63.89% of its industry peers.
A Quick Ratio of 0.78 indicates that HRB may have some problems paying its short term obligations.
HRB has a Quick ratio of 0.78. This is in the lower half of the industry: HRB underperforms 63.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The earnings per share for HRB have decreased by -6.42% in the last year.
Measured over the past years, HRB shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.54% on average per year.
The Revenue has decreased by -1.36% in the past year.
HRB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.13% yearly.
EPS 1Y (TTM)-6.42%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%8.91%
Revenue 1Y (TTM)-1.36%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%4.22%
3.2 Future
Based on estimates for the next years, HRB will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.67% on average per year.
Based on estimates for the next years, HRB will show a small growth in Revenue. The Revenue will grow by 2.91% on average per year.
EPS Next Y17.57%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
EPS Next 5YN/A
Revenue Next Year4.18%
Revenue Next 2Y3.46%
Revenue Next 3Y2.91%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
The Price/Earnings ratio is 12.81, which indicates a correct valuation of HRB.
Based on the Price/Earnings ratio, HRB is valued cheaply inside the industry as 86.11% of the companies are valued more expensively.
HRB is valuated cheaply when we compare the Price/Earnings ratio to 27.52, which is the current average of the S&P500 Index.
HRB is valuated reasonably with a Price/Forward Earnings ratio of 10.77.
Based on the Price/Forward Earnings ratio, HRB is valued cheaply inside the industry as 88.89% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of HRB to the average of the S&P500 Index (35.58), we can say HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.81 | ||
| Fwd PE | 10.77 |
4.2 Price Multiples
73.61% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.56 | ||
| EV/EBITDA | 8.9 |
4.3 Compensation for Growth
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.
PEG (NY)0.73
PEG (5Y)0.82
EPS Next 2Y7.34%
EPS Next 3Y8.67%
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 3.87, HRB pays a better dividend. On top of this HRB pays more dividend than 95.83% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, 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 Years9
Div Non Decr Years27
5.3 Sustainability
34.30% of the earnings are spent on dividend by HRB. This is a low number and sustainable payout ratio.
The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP34.3%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
55.98
-0.15 (-0.27%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners98.19%
Inst Owner Change0%
Ins Owners0.85%
Ins Owner Change-1.79%
Market Cap7.49B
Analysts50.91
Price Target65.28 (16.61%)
Short Float %8.95%
Short Ratio8.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Yearly Dividend1.26
Dividend Growth(5Y)4.72%
DP34.3%
Div Incr Years9
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.26%
Min EPS beat(2)-7.56%
Max EPS beat(2)3.03%
EPS beat(4)3
Avg EPS beat(4)1.17%
Min EPS beat(4)-7.56%
Max EPS beat(4)7.39%
EPS beat(8)7
Avg EPS beat(8)5.69%
EPS beat(12)10
Avg EPS beat(12)5.9%
EPS beat(16)13
Avg EPS beat(16)7.76%
Revenue beat(2)1
Avg Revenue beat(2)-1.51%
Min Revenue beat(2)-3.34%
Max Revenue beat(2)0.31%
Revenue beat(4)3
Avg Revenue beat(4)0.3%
Min Revenue beat(4)-3.34%
Max Revenue beat(4)2.37%
Revenue beat(8)6
Avg Revenue beat(8)0.99%
Revenue beat(12)8
Avg Revenue beat(12)1.65%
Revenue beat(16)11
Avg Revenue beat(16)-2.11%
PT rev (1m)0%
PT rev (3m)2.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.95%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.81 | ||
| Fwd PE | 10.77 | ||
| P/S | 2.02 | ||
| P/FCF | 11.56 | ||
| P/OCF | 10.27 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.9 |
EPS(TTM)4.37
EY7.81%
EPS(NY)5.2
Fwd EY9.28%
FCF(TTM)4.84
FCFY8.65%
OCF(TTM)5.45
OCFY9.74%
SpS27.73
BVpS-1.44
TBVpS-9.33
PEG (NY)0.73
PEG (5Y)0.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.23% | ||
| ROE | N/A | ||
| ROCE | 48.79% | ||
| ROIC | 38.4% | ||
| ROICexc | 72.05% | ||
| ROICexgc | N/A | ||
| OM | 21.75% | ||
| PM (TTM) | 15.06% | ||
| GM | 44.53% | ||
| FCFM | 17.46% |
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-Score7
Asset Turnover1.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Debt/EBITDA | 1.23 | ||
| Cap/Depr | 69.16% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 11.14 | ||
| Cash Conversion | 78.86% | ||
| Profit Quality | 115.93% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 3.05 |
F-Score7
WACC8.46%
ROIC/WACC4.54
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)-6.42%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%8.91%
EPS Next Y17.57%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.36%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%4.22%
Revenue Next Year4.18%
Revenue Next 2Y3.46%
Revenue Next 3Y2.91%
Revenue Next 5YN/A
EBIT growth 1Y29.28%
EBIT growth 3Y1.52%
EBIT growth 5Y5.51%
EBIT Next Year11.04%
EBIT Next 3Y5.84%
EBIT Next 5YN/A
FCF growth 1Y-25.3%
FCF growth 3Y4.67%
FCF growth 5Y5.16%
OCF growth 1Y-21.83%
OCF growth 3Y4.82%
OCF growth 5Y3.52%