H&R BLOCK INC (HRB) Stock Fundamental Analysis
NYSE:HRB - US0936711052 - Common Stock
52.13 USD
+0.8 (+1.56%)
52.13 USD
0 (0%)
Taking everything into account, HRB scores 6 out of 10 in our fundamental rating. HRB was compared to 71 industry peers in the Diversified Consumer Services industry. HRB scores excellent on profitability, but there are 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.
1. Profitability
1.1 Basic Checks
HRB had positive earnings in the past year.
In the past year HRB had a positive cash flow from operations.
Of the past 5 years HRB 4 years were profitable.
Of the past 5 years HRB 4 years had a positive operating cash flow.
1.2 Ratios
HRB has a Return On Assets of 17.23%. This is amongst the best in the industry. HRB outperforms 92.96% of its industry peers.
HRB's Return On Invested Capital of 38.40% is amongst the best of the industry. HRB outperforms 98.59% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 10.23%.
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
HRB has a better Profit Margin (15.06%) than 85.92% of its industry peers.
HRB's Profit Margin has improved in the last couple of years.
HRB's Operating Margin of 21.75% is amongst the best of the industry. HRB outperforms 87.32% of its industry peers.
HRB's Operating Margin has improved in the last couple of years.
The Gross Margin of HRB (44.53%) is comparable to the rest of the 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.
There is no outstanding debt for HRB. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
HRB has an Altman-Z score of 2.95. This is not the best score and indicates that HRB is in the grey zone with still only limited risk for bankruptcy at the moment.
HRB has a better Altman-Z score (2.95) than 70.42% of its industry peers.
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.
The Debt to FCF ratio of HRB (2.30) is better than 76.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Altman-Z | 2.95 |
ROIC/WACC4.37
WACC8.79%
2.3 Liquidity
A Current Ratio of 0.78 indicates that HRB may have some problems paying its short term obligations.
The Current ratio of HRB (0.78) is worse than 66.20% of its industry peers.
A Quick Ratio of 0.78 indicates that HRB may have some problems paying its short term obligations.
The Quick ratio of HRB (0.78) is worse than 66.20% 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 has been growing slightly by 5.32% over the past year.
The Earnings Per Share has been growing by 43.89% on average over the past years. This is a very strong growth
EPS 1Y (TTM)5.32%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%20.11%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%4.55%
3.2 Future
The Earnings Per Share is expected to grow by 12.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.32% on average over the next years.
EPS Next Y6.74%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
EPS Next 5YN/A
Revenue Next Year3.8%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.97, the valuation of HRB can be described as reasonable.
HRB's Price/Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 85.92% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.24, HRB is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.28, the valuation of HRB can be described as very reasonable.
90.14% of the companies in the same industry are more expensive than HRB, based on the Price/Forward Earnings ratio.
HRB is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.81, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.97 | ||
| Fwd PE | 10.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HRB indicates a somewhat cheap valuation: HRB is cheaper than 74.65% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 90.14% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.77 | ||
| EV/EBITDA | 8.32 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
HRB has an outstanding profitability rating, which may justify a higher PE ratio.
HRB's earnings are expected to grow with 12.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)0.25
EPS Next 2Y7.99%
EPS Next 3Y12.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.27%, HRB has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.61, HRB pays a better dividend. On top of this HRB pays more dividend than 97.18% of the companies listed in the same industry.
HRB's Dividend Yield is a higher than the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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
34.30% of the earnings are spent on dividend by HRB. This is a low number and sustainable payout ratio.
The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP34.3%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
52.13
+0.8 (+1.56%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners97.8%
Inst Owner Change-5.07%
Ins Owners0.85%
Ins Owner Change1.97%
Market Cap6.98B
Analysts50.91
Price Target56.1 (7.62%)
Short Float %7.93%
Short Ratio7.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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)-14.06%
PT rev (3m)-11.76%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.97 | ||
| Fwd PE | 10.28 | ||
| P/S | 1.88 | ||
| P/FCF | 10.77 | ||
| P/OCF | 9.56 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.32 |
EPS(TTM)4.75
EY9.11%
EPS(NY)5.07
Fwd EY9.73%
FCF(TTM)4.84
FCFY9.29%
OCF(TTM)5.45
OCFY10.46%
SpS27.73
BVpS-1.44
TBVpS-9.33
PEG (NY)1.63
PEG (5Y)0.25
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 | 2.95 |
F-Score7
WACC8.79%
ROIC/WACC4.37
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)5.32%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%20.11%
EPS Next Y6.74%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%4.55%
Revenue Next Year3.8%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
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 5Y6.24%
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%