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.
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.
H&R Block (NYSE:HRB) offers a reliable 2.58% dividend yield, strong profitability, and reasonable valuation, making it a solid pick for dividend investors.