Don't overlook NYSE:HRB—it's a hidden gem with strong fundamentals and an attractive price tag.

Our stock screening tool has identified H&R BLOCK INC (NYSE:HRB) as an undervalued gem with strong fundamentals. NYSE:HRB boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Assessing Valuation for NYSE:HRB

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:HRB, the assigned 8 reflects its valuation:

• HRB's Price/Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 85.94% of the companies in the same industry.
• HRB's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.47.
• A Price/Forward Earnings ratio of 10.48 indicates a reasonable valuation of HRB.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 92.19% of the companies listed in the same industry.
• When comparing the Price/Forward Earnings ratio of HRB to the average of the S&P500 Index (92.74), we can say HRB is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, HRB is valued a bit cheaper than the industry average as 70.31% of the companies are valued more expensively.
• 90.63% of the companies in the same industry are more expensive than HRB, based on the Price/Free Cash Flow ratio.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• HRB has a very decent profitability rating, which may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:HRB, the assigned 7 is a significant indicator of profitability:

• HRB has a Return On Assets of 16.49%. This is amongst the best in the industry. HRB outperforms 92.19% of its industry peers.
• HRB has a Return On Invested Capital of 25.89%. This is amongst the best in the industry. HRB outperforms 95.31% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 11.54%.
• With a decent Profit Margin value of 11.05%, HRB is doing good in the industry, outperforming 79.69% of the companies in the same industry.
• In the last couple of years the Profit Margin of HRB has grown nicely.
• Looking at the Operating Margin, with a value of 15.17%, HRB is in the better half of the industry, outperforming 79.69% of the companies in the same industry.
• In the last couple of years the Operating Margin of HRB has grown nicely.

Analyzing Health Metrics

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:HRB has achieved a 5 out of 10:

• An Altman-Z score of 3.45 indicates that HRB is not in any danger for bankruptcy at the moment.
• HRB's Altman-Z score of 3.45 is amongst the best of the industry. HRB outperforms 81.25% of its industry peers.
• 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.
• HRB's Debt to FCF ratio of 2.27 is fine compared to the rest of the industry. HRB outperforms 75.00% of its industry peers.

How We Gauge Growth for NYSE:HRB

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:HRB has earned a 4 for growth:

• 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 Earnings Per Share is expected to grow by 8.29% on average over the next years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of HRB contains the most current fundamental analsysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.