H&R BLOCK INC (NYSE:HRB) – A Reliable Dividend Stock Worth Considering

H&R BLOCK INC (NYSE:HRB) was identified as a strong dividend candidate by our screening process. The company combines a solid dividend profile with good profitability and reasonable financial health, making it an interesting option for income-focused investors.

Dividend Strength

• Attractive Yield: HRB offers a dividend yield of 2.58%, which is above the S&P 500 average of 2.40%.
• Reliable Track Record: The company has paid dividends consistently for at least 10 years without reductions.
• Sustainable Payout: With a payout ratio of 34.30%, HRB retains enough earnings to support future dividends and growth.
• Modest Growth: The dividend has grown at an annual rate of 4.72%, indicating steady increases over time.

Profitability & Valuation

• Strong Margins: HRB’s Profit Margin (15.06%) and Operating Margin (21.75%) rank among the best in its industry.
• High ROIC: The company generates a Return on Invested Capital (ROIC) of 38.40%, well above its cost of capital.
• Reasonable Valuation: Trading at a P/E of 13.10, HRB is cheaper than 87.5% of its industry peers.

Financial Health Considerations

• Solvency: HRB’s Debt-to-FCF ratio (2.30) suggests manageable debt levels.
• Liquidity Concerns: The Current Ratio (0.78) is below industry norms, which may require monitoring.

For a deeper look, review the full fundamental analysis of HRB.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own research before making investment decisions.