H&R BLOCK INC (HRB) Stock Fundamental Analysis
NYSE:HRB - New York Stock Exchange, Inc. - US0936711052 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to HRB. HRB was compared to 72 industry peers in the Diversified Consumer Services industry. While HRB belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HRB is cheap, but on the other hand it scores bad on growth. Finally HRB also has an excellent dividend rating. These ratings could make HRB a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
HRB had positive earnings in the past year.
HRB had a positive operating cash flow in the past year.
HRB had positive earnings in 4 of the past 5 years.
HRB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HRB (17.23%) is better than 94.44% of its industry peers.
The Return On Invested Capital of HRB (38.40%) is better than 98.61% of its industry peers.
HRB had an Average Return On Invested Capital over the past 3 years of 27.24%. This is significantly above the industry average of 10.66%.
The last Return On Invested Capital (38.40%) for HRB is above the 3 year average (27.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.23% | ||
| ROE | N/A | ||
| ROIC | 38.4% |
ROA(3y)17.74%
ROA(5y)13.8%
ROE(3y)877.58%
ROE(5y)557.23%
ROIC(3y)27.24%
ROIC(5y)22.03%
1.3 Margins
With an excellent Profit Margin value of 15.06%, HRB belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
HRB's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 21.75%, HRB belongs to the best of the industry, outperforming 90.28% of the companies in the same industry.
In the last couple of years the Operating Margin of HRB has grown nicely.
Looking at the Gross Margin, with a value of 44.53%, HRB is in line with its industry, outperforming 51.39% of the companies in the same industry.
HRB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.75% | ||
| PM (TTM) | 15.06% | ||
| GM | 44.53% |
OM growth 3Y-0.35%
OM growth 5Y2.31%
PM growth 3Y-1.2%
PM growth 5Y3.82%
GM growth 3Y-0.88%
GM growth 5Y0.73%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HRB is creating value.
HRB has less shares outstanding than it did 1 year ago.
HRB has less shares outstanding than it did 5 years ago.
HRB has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.01 indicates that HRB is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.01, HRB is in the better half of the industry, outperforming 69.44% of the companies in the same industry.
HRB has a debt to FCF ratio of 2.30. This is a good value and a sign of high solvency as HRB would need 2.30 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.30, HRB is in the better half of the industry, outperforming 76.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Altman-Z | 3.01 |
ROIC/WACC4.78
WACC8.04%
2.3 Liquidity
HRB has a Current Ratio of 0.78. 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 Current ratio (0.78) than 63.89% of its industry peers.
HRB has a Quick Ratio of 0.78. 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 Quick ratio of HRB (0.78) is worse than 63.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The earnings per share for HRB have decreased by -6.42% in the last year.
The Earnings Per Share has been growing by 15.54% on average over the past years. This is quite good.
Looking at the last year, HRB shows a decrease in Revenue. The Revenue has decreased by -1.36% in the last year.
Measured over the past years, HRB shows a small growth in Revenue. The Revenue has been growing by 3.13% on average per year.
EPS 1Y (TTM)-6.42%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%8.91%
Revenue 1Y (TTM)-1.36%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%4.22%
3.2 Future
Based on estimates for the next years, HRB will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.67% on average per year.
Based on estimates for the next years, HRB will show a small growth in Revenue. The Revenue will grow by 2.91% on average per year.
EPS Next Y17.57%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
EPS Next 5YN/A
Revenue Next Year4.18%
Revenue Next 2Y3.46%
Revenue Next 3Y2.91%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.47, HRB is valued correctly.
Based on the Price/Earnings ratio, HRB is valued cheaply inside the industry as 84.72% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.82. HRB is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.48, which indicates a very decent 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 87.50% of the companies listed 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 36.21.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.47 | ||
| Fwd PE | 10.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRB is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
HRB's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HRB is cheaper than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.25 | ||
| EV/EBITDA | 8.66 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of HRB may justify a higher PE ratio.
PEG (NY)0.71
PEG (5Y)0.8
EPS Next 2Y7.34%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.76%, HRB has a reasonable but not impressive dividend return.
HRB's Dividend Yield is rather good when compared to the industry average which is at 3.93. HRB pays more dividend than 95.83% of the companies in the same industry.
HRB's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
5.2 History
The dividend of HRB has a limited annual growth rate of 4.72%.
HRB has paid a dividend for at least 10 years, which is a reliable track record.
HRB has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.72%
Div Incr Years9
Div Non Decr Years27
5.3 Sustainability
HRB pays out 34.30% 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.
DP34.3%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
54.48
+0.14 (+0.26%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners98.19%
Inst Owner Change-0.56%
Ins Owners0.85%
Ins Owner Change-1.68%
Market Cap7.29B
Analysts50.91
Price Target65.28 (19.82%)
Short Float %8.4%
Short Ratio9.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
Yearly Dividend1.26
Dividend Growth(5Y)4.72%
DP34.3%
Div Incr Years9
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.26%
Min EPS beat(2)-7.56%
Max EPS beat(2)3.03%
EPS beat(4)3
Avg EPS beat(4)1.17%
Min EPS beat(4)-7.56%
Max EPS beat(4)7.39%
EPS beat(8)7
Avg EPS beat(8)5.69%
EPS beat(12)10
Avg EPS beat(12)5.9%
EPS beat(16)13
Avg EPS beat(16)7.76%
Revenue beat(2)1
Avg Revenue beat(2)-1.51%
Min Revenue beat(2)-3.34%
Max Revenue beat(2)0.31%
Revenue beat(4)3
Avg Revenue beat(4)0.3%
Min Revenue beat(4)-3.34%
Max Revenue beat(4)2.37%
Revenue beat(8)6
Avg Revenue beat(8)0.99%
Revenue beat(12)8
Avg Revenue beat(12)1.65%
Revenue beat(16)11
Avg Revenue beat(16)-2.11%
PT rev (1m)0%
PT rev (3m)2.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.95%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.47 | ||
| Fwd PE | 10.48 | ||
| P/S | 1.96 | ||
| P/FCF | 11.25 | ||
| P/OCF | 9.99 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.66 |
EPS(TTM)4.37
EY8.02%
EPS(NY)5.2
Fwd EY9.54%
FCF(TTM)4.84
FCFY8.89%
OCF(TTM)5.45
OCFY10.01%
SpS27.73
BVpS-1.44
TBVpS-9.33
PEG (NY)0.71
PEG (5Y)0.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.23% | ||
| ROE | N/A | ||
| ROCE | 48.79% | ||
| ROIC | 38.4% | ||
| ROICexc | 72.05% | ||
| ROICexgc | N/A | ||
| OM | 21.75% | ||
| PM (TTM) | 15.06% | ||
| GM | 44.53% | ||
| FCFM | 17.46% |
ROA(3y)17.74%
ROA(5y)13.8%
ROE(3y)877.58%
ROE(5y)557.23%
ROIC(3y)27.24%
ROIC(5y)22.03%
ROICexc(3y)49.03%
ROICexc(5y)40.5%
ROICexgc(3y)423.16%
ROICexgc(5y)N/A
ROCE(3y)34.61%
ROCE(5y)27.98%
ROICexcg growth 3Y48.94%
ROICexcg growth 5YN/A
ROICexc growth 3Y11.08%
ROICexc growth 5Y-2.4%
OM growth 3Y-0.35%
OM growth 5Y2.31%
PM growth 3Y-1.2%
PM growth 5Y3.82%
GM growth 3Y-0.88%
GM growth 5Y0.73%
F-Score7
Asset Turnover1.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Debt/EBITDA | 1.23 | ||
| Cap/Depr | 69.16% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 11.14 | ||
| Cash Conversion | 78.86% | ||
| Profit Quality | 115.93% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 3.01 |
F-Score7
WACC8.04%
ROIC/WACC4.78
Cap/Depr(3y)49.77%
Cap/Depr(5y)46.23%
Cap/Sales(3y)1.85%
Cap/Sales(5y)2.04%
Profit Quality(3y)127.56%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.42%
EPS 3Y9.34%
EPS 5Y15.54%
EPS Q2Q%8.91%
EPS Next Y17.57%
EPS Next 2Y7.34%
EPS Next 3Y8.67%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.36%
Revenue growth 3Y1.88%
Revenue growth 5Y3.13%
Sales Q2Q%4.22%
Revenue Next Year4.18%
Revenue Next 2Y3.46%
Revenue Next 3Y2.91%
Revenue Next 5YN/A
EBIT growth 1Y29.28%
EBIT growth 3Y1.52%
EBIT growth 5Y5.51%
EBIT Next Year11.04%
EBIT Next 3Y5.84%
EBIT Next 5YN/A
FCF growth 1Y-25.3%
FCF growth 3Y4.67%
FCF growth 5Y5.16%
OCF growth 1Y-21.83%
OCF growth 3Y4.82%
OCF growth 5Y3.52%