H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRB - US0936711052 - Common Stock
39.05 USD
-0.24 (-0.61%)
38.7 USD
-0.35 (-0.9%)
HRB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 76 industry peers in the Diversified Consumer Services industry. HRB scores excellent on profitability, but 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. Finally HRB also has an excellent dividend rating. These ratings would make HRB suitable 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.
- In the past 5 years HRB has always been profitable.
- HRB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 23.16%, HRB belongs to the best of the industry, outperforming 96.05% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 35.30%, HRB belongs to the best of the industry, outperforming 98.68% of the companies in the same industry.
- 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 last Return On Invested Capital (35.30%) for HRB is above the 3 year average (29.50%), which is a sign of increasing profitability.
| 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
- HRB has a Profit Margin of 16.10%. This is amongst the best in the industry. HRB outperforms 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 has a Operating Margin of 22.52%. This is amongst the best in the industry. HRB outperforms 86.84% of its industry peers.
- In the last couple of years the Operating Margin of HRB has grown nicely.
- HRB has a Gross Margin of 44.56%. This is comparable to the rest of the industry: HRB outperforms 47.37% of its industry peers.
- In the last couple of years the Gross Margin of HRB has grown nicely.
| 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
- HRB has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 3.04 indicates that HRB is not in any danger for bankruptcy at the moment.
- HRB's Altman-Z score of 3.04 is fine compared to the rest of the industry. HRB outperforms 72.37% of its industry peers.
- 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.
- HRB's Debt to FCF ratio of 3.01 is fine compared to the rest of the industry. HRB outperforms 76.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.01 | ||
| Altman-Z | 3.04 |
ROIC/WACC4.57
WACC7.73%
2.3 Liquidity
- HRB has a Current 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.
- The Current ratio of HRB (0.76) is worse than 71.05% of its industry peers.
- 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.
- HRB has a worse Quick ratio (0.76) than 67.11% of its industry peers.
| 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.
- HRB shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 43.89% yearly.
- Looking at the last year, HRB shows a decrease in Revenue. The Revenue has decreased by -0.88% in the last year.
- Measured over the past years, HRB shows a small growth in Revenue. The Revenue has been growing by 7.34% on average per year.
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
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
- The Price/Earnings ratio is 8.27, which indicates a very decent valuation of HRB.
- Based on the Price/Earnings ratio, HRB is valued cheaper than 85.53% of the companies in the same industry.
- When comparing the Price/Earnings ratio of HRB to the average of the S&P500 Index (28.60), we can say HRB is valued rather cheaply.
- HRB is valuated cheaply with a Price/Forward Earnings ratio of 7.02.
- HRB's Price/Forward Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 94.74% of the companies in the same industry.
- HRB's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.27 | ||
| Fwd PE | 7.02 |
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 78.95% 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 94.74% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.57 | ||
| EV/EBITDA | 6.55 |
4.3 Compensation for Growth
- HRB's 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)1.64
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 -21.49%. 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.
- Compared to an average S&P500 Dividend Yield of 1.82, HRB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.14% |
5.2 History
- The dividend of HRB is nicely growing with an annual growth rate of 6.79%!
- 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)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.
- HRB's earnings are growing more than its dividend. This makes the dividend growth 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.