H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - NYSE:HRB - US0936711052 - Common Stock
52.59 USD
+1.26 (+2.45%)
52.59 USD
0 (0%)
Overall HRB gets a fundamental rating of 7 out of 10. We evaluated HRB against 77 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. 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 each of the past 5 years.
In the past 5 years HRB always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 18.40%, HRB belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
HRB has a better Return On Equity (675.51%) than 100.00% of its industry peers.
HRB has a better Return On Invested Capital (32.95%) than 98.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 9.48%.
The 3 year average ROIC (29.50%) for HRB is below the current ROIC(32.95%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 675.51% | ||
| ROIC | 32.95% |
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
Looking at the Profit Margin, with a value of 15.97%, HRB belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
HRB's Profit Margin has been stable in the last couple of years.
The Operating Margin of HRB (22.01%) is better than 86.67% of its industry peers.
In the last couple of years the Operating Margin of HRB has grown nicely.
Looking at the Gross Margin, with a value of 44.53%, HRB is in line with its industry, outperforming 46.67% of the companies in the same industry.
HRB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.01% | ||
| PM (TTM) | 15.97% | ||
| GM | 44.53% |
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.
The number of shares outstanding for HRB has been reduced compared to 1 year ago.
HRB has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HRB has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.18 indicates that HRB is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.18, HRB is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
The Debt to FCF ratio of HRB is 2.49, which is a good value as it means it would take HRB, 2.49 years of fcf income to pay off all of its debts.
HRB has a better Debt to FCF ratio (2.49) than 74.67% of its industry peers.
HRB has a Debt/Equity ratio of 12.86. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of HRB (12.86) is worse than 84.00% of its industry peers.
Even though the debt/equity ratio score it not favorable for HRB, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.86 | ||
| Debt/FCF | 2.49 | ||
| Altman-Z | 3.18 |
ROIC/WACC4.22
WACC7.8%
2.3 Liquidity
A Current Ratio of 0.90 indicates that HRB may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.90, HRB is doing worse than 65.33% of the companies in the same industry.
A Quick Ratio of 0.90 indicates that HRB may have some problems paying its short term obligations.
The Quick ratio of HRB (0.90) is worse than 62.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.32% 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 -0.87%.
HRB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.34% yearly.
EPS 1Y (TTM)5.32%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%20.11%
Revenue 1Y (TTM)-0.87%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%4.55%
3.2 Future
The Earnings Per Share is expected to grow by 12.47% on average over the next years. This is quite good.
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 Y5.25%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
EPS Next 5YN/A
Revenue Next Year4.28%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 11.07, which indicates a very decent valuation of HRB.
86.67% of the companies in the same industry are more expensive than HRB, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.40, HRB is valued rather cheaply.
The Price/Forward Earnings ratio is 10.52, which indicates a very decent valuation of HRB.
89.33% of the companies in the same industry are more expensive than HRB, based on the Price/Forward Earnings ratio.
HRB is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.07 | ||
| Fwd PE | 10.52 |
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 80.00% of the companies listed in the same industry.
89.33% of the companies in the same industry are more expensive than HRB, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.23 | ||
| EV/EBITDA | 7.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HRB does not grow enough to justify the current Price/Earnings ratio.
HRB has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HRB's earnings are expected to grow with 12.47% in the coming years.
PEG (NY)2.11
PEG (5Y)0.25
EPS Next 2Y7.99%
EPS Next 3Y12.47%
5. Dividend
5.1 Amount
HRB has a Yearly Dividend Yield of 3.27%.
HRB's Dividend Yield is rather good when compared to the industry average which is at 2.02. HRB pays more dividend than 98.67% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, HRB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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
32.86% 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.
DP32.86%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
52.59
+1.26 (+2.45%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.26%
Inst Owner Change-0.59%
Ins Owners0.95%
Ins Owner Change2.79%
Market Cap6.72B
Analysts50.91
Price Target56.1 (6.67%)
Short Float %8.43%
Short Ratio6.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
Yearly Dividend1.44
Dividend Growth(5Y)6.79%
DP32.86%
Div Incr Years9
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-8.81%
Min EPS beat(2)-20.65%
Max EPS beat(2)3.03%
EPS beat(4)2
Avg EPS beat(4)-5.84%
Min EPS beat(4)-20.65%
Max EPS beat(4)3.03%
EPS beat(8)6
Avg EPS beat(8)2.12%
EPS beat(12)9
Avg EPS beat(12)3.02%
EPS beat(16)13
Avg EPS beat(16)6.53%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)0.31%
Max Revenue beat(2)2.3%
Revenue beat(4)3
Avg Revenue beat(4)0.29%
Min Revenue beat(4)-3.34%
Max Revenue beat(4)2.3%
Revenue beat(8)6
Avg Revenue beat(8)1.16%
Revenue beat(12)8
Avg Revenue beat(12)1.47%
Revenue beat(16)12
Avg Revenue beat(16)2.69%
PT rev (1m)0%
PT rev (3m)-14.06%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.55%
EPS NY rev (1m)-1.39%
EPS NY rev (3m)-3.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.07 | ||
| Fwd PE | 10.52 | ||
| P/S | 1.79 | ||
| P/FCF | 11.23 | ||
| P/OCF | 9.88 | ||
| P/B | 75.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.49 |
EPS(TTM)4.75
EY9.03%
EPS(NY)5
Fwd EY9.51%
FCF(TTM)4.68
FCFY8.91%
OCF(TTM)5.32
OCFY10.13%
SpS29.41
BVpS0.7
TBVpS-7.61
PEG (NY)2.11
PEG (5Y)0.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 675.51% | ||
| ROCE | 42.13% | ||
| ROIC | 32.95% | ||
| ROICexc | 65.95% | ||
| ROICexgc | N/A | ||
| OM | 22.01% | ||
| PM (TTM) | 15.97% | ||
| GM | 44.53% | ||
| FCFM | 15.92% |
ROA(3y)18.28%
ROA(5y)17.52%
ROE(3y)1016.86%
ROE(5y)695.21%
ROIC(3y)29.5%
ROIC(5y)27.67%
ROICexc(3y)56.68%
ROICexc(5y)50.15%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)37.72%
ROCE(5y)35.37%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y16.18%
ROICexc growth 5Y32.13%
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%
F-Score7
Asset Turnover1.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.86 | ||
| Debt/FCF | 2.49 | ||
| Debt/EBITDA | 1.21 | ||
| Cap/Depr | 70.22% | ||
| Cap/Sales | 2.18% | ||
| Interest Coverage | 11.09 | ||
| Cash Conversion | 72.07% | ||
| Profit Quality | 99.73% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 3.18 |
F-Score7
WACC7.8%
ROIC/WACC4.22
Cap/Depr(3y)58.64%
Cap/Depr(5y)50.63%
Cap/Sales(3y)1.98%
Cap/Sales(5y)1.86%
Profit Quality(3y)115.52%
Profit Quality(5y)116.11%
High Growth Momentum
Growth
EPS 1Y (TTM)5.32%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%20.11%
EPS Next Y5.25%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.87%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%4.55%
Revenue Next Year4.28%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
EBIT growth 1Y38.23%
EBIT growth 3Y3.59%
EBIT growth 5Y35.23%
EBIT Next Year14.81%
EBIT Next 3Y8.21%
EBIT Next 5YN/A
FCF growth 1Y-8.88%
FCF growth 3Y-7.08%
FCF growth 5Y85.45%
OCF growth 1Y-5.55%
OCF growth 3Y-5.57%
OCF growth 5Y44.25%