H&R BLOCK INC (NYSE:HRB) Offers a Sustainable 3.35% Dividend Yield

H&R BLOCK INC (NYSE:HRB) is a notable option for dividend-focused investors, found by a systematic screening method made to find companies with solid, lasting income traits. The screening process focuses on stocks showing strong dividend ratings, which consider factors like yield, growth, and payout sustainability, while also keeping sufficient profitability and financial condition to continue distributions. This balanced method helps prevent the typical mistake of pursuing high yields that might not last because of basic operational or financial issues.

Dividend Strength and Sustainability

H&R Block’s dividend profile is distinguished by its dependability and acceptable yield, important factors for income-focused plans. The company’s 3.35% dividend yield is higher than the S&P 500 average and is strong in its industry, placing it well for investors wanting regular income. Most significantly, the dividend is supported by a sustainable payout ratio of 32.86%, showing that less than a third of earnings are used for shareholder payments, leaving plenty of room for reinvestment and protection from earnings changes. The history is another positive: H&R Block has not cut its dividend in more than ten years, showing management’s dedication to giving capital back to shareholders even during different economic periods.

Profitability Supports Payouts

A good dividend stock needs to produce steady profits to pay for its distributions, and H&R Block is very good here. The company’s profitability rating of 9/10 shows outstanding operational efficiency and earnings capability. Important measures include:

• Return on Invested Capital (ROIC) of 32.95%, much better than industry competitors
• A profit margin of 15.97%, in the highest group of its sector
• Steady positive earnings and cash flow over the last five years

These numbers show that H&R Block can not only keep its present dividend but also has the financial capacity to possibly raise it later, matching the screening standards that stress earnings quality as a base for dependable income.

Financial Health Considerations

While the screen needed a minimum health rating, H&R Block’s score of 5/10 points to a varied situation that needs notice. On the good side, the company gains from a strong Altman-Z score and controllable debt compared to free cash flow, showing solvency and a capacity to handle long-term responsibilities. However, liquidity measures like the current and quick ratios under 1.0 show possible near-term limits. For dividend investors, this highlights the need to watch working capital and cash flow patterns, though the general health picture is still acceptable within the screen’s limits, which focus on dividend and profitability measures while requiring basic financial steadiness.

Valuation and Growth Context

H&R Block seems priced appealingly, with a P/E ratio of 10.81 much lower than both the industry and S&P 500 averages. This low price may provide a safety buffer for income investors, especially with predicted EPS growth of 12.47% per year. While revenue growth has been slow, the attention on earnings growth backs the argument for dividend continuity and possible raises. The company’s history of share buybacks also strengthens capital returns, fitting with a shareholder-oriented method.

Exploring Additional Opportunities

For investors curious about comparable dividend stocks that satisfy standards for high ratings in dividend quality, profitability, and health, more investigation can be done using the pre-configured screener. This tool lets users filter and order outcomes using particular financial measures and ratings, offering a efficient way to find income-producing investments that mix yield with fundamental soundness.

Disclaimer: This analysis is based on publicly available information and is provided for informational purposes only. It does not constitute investment advice, and readers should conduct their own research or consult a financial advisor before making investment decisions.