H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - NYSE:HRB - US0936711052 - Common Stock
51.22 USD
-0.91 (-1.75%)
51.22 USD
0 (0%)
Overall HRB gets a fundamental rating of 7 out of 10. We evaluated HRB against 74 industry peers in the Diversified Consumer Services industry. HRB scores excellent on profitability, but there are some minor concerns on its financial health. HRB may be a bit undervalued, certainly considering the very reasonable score 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.
In the past year HRB had a positive cash flow from operations.
In the past 5 years HRB has always been profitable.
Each year in the past 5 years HRB had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.40%, HRB belongs to the top of the industry, outperforming 93.15% of the companies in the same industry.
The Return On Equity of HRB (675.51%) is better than 100.00% of its industry peers.
HRB has a better Return On Invested Capital (32.95%) than 98.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 9.88%.
The 3 year average ROIC (29.50%) for HRB is below the current ROIC(32.95%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 675.51% | ||
| ROIC | 32.95% |
ROA(3y)18.28%
ROA(5y)17.52%
ROE(3y)1016.86%
ROE(5y)695.21%
ROIC(3y)29.5%
ROIC(5y)27.67%
1.3 Margins
HRB has a Profit Margin of 15.97%. This is amongst the best in the industry. HRB outperforms 86.30% of its industry peers.
HRB's Profit Margin has been stable in the last couple of years.
HRB has a Operating Margin of 22.01%. This is amongst the best in the industry. HRB outperforms 86.30% of its industry peers.
In the last couple of years the Operating Margin of HRB has grown nicely.
With a Gross Margin value of 44.53%, HRB perfoms like the industry average, outperforming 49.32% of the companies in the same industry.
HRB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.01% | ||
| PM (TTM) | 15.97% | ||
| GM | 44.53% |
OM growth 3Y0.78%
OM growth 5Y25.98%
PM growth 3Y0.25%
PM growth 5YN/A
GM growth 3Y-0.84%
GM growth 5Y4.86%
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.
Compared to 5 years ago, HRB has less shares outstanding
The debt/assets ratio for HRB has been reduced compared to a year ago.
2.2 Solvency
HRB has an Altman-Z score of 3.26. This indicates that HRB is financially healthy and has little risk of bankruptcy at the moment.
HRB has a Altman-Z score of 3.26. This is in the better half of the industry: HRB outperforms 75.34% of its industry peers.
The Debt to FCF ratio of HRB is 2.49, which is a good value as it means it would take HRB, 2.49 years of fcf income to pay off all of its debts.
HRB has a better Debt to FCF ratio (2.49) than 75.34% of its industry peers.
A Debt/Equity ratio of 12.86 is on the high side and indicates that HRB has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 12.86, HRB is doing worse than 84.93% of the companies in the same industry.
Although HRB does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.86 | ||
| Debt/FCF | 2.49 | ||
| Altman-Z | 3.26 |
ROIC/WACC3.94
WACC8.37%
2.3 Liquidity
HRB has a Current Ratio of 0.90. 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 Current ratio of 0.90. This is in the lower half of the industry: HRB underperforms 65.75% of its industry peers.
HRB has a Quick Ratio of 0.90. This is a bad value and indicates that HRB is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.90, HRB is doing worse than 64.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
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
Looking at the last year, HRB shows a decrease in Revenue. The Revenue has decreased by -0.87% in the last year.
The Revenue has been growing slightly by 7.34% on average over the past years.
EPS 1Y (TTM)5.32%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%20.11%
Revenue 1Y (TTM)-0.87%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%4.55%
3.2 Future
HRB is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.47% yearly.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.78 indicates a reasonable valuation of HRB.
Compared to the rest of the industry, the Price/Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 87.67% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. HRB is valued rather cheaply when compared to this.
HRB is valuated reasonably with a Price/Forward Earnings ratio of 10.10.
HRB's Price/Forward Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 91.78% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.73, HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.78 | ||
| Fwd PE | 10.1 |
4.2 Price Multiples
HRB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HRB is cheaper than 80.82% of the companies in the same industry.
HRB's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HRB is cheaper than 87.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.46 | ||
| EV/EBITDA | 7.93 |
4.3 Compensation for Growth
HRB's 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.
A more expensive valuation may be justified as HRB's earnings are expected to grow with 12.47% in the coming years.
PEG (NY)1.6
PEG (5Y)0.25
EPS Next 2Y7.99%
EPS Next 3Y12.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.22%, HRB has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.05, HRB pays a better dividend. On top of this HRB pays more dividend than 95.89% of the companies listed in the same industry.
HRB's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.22% |
5.2 History
On average, the dividend of HRB grows each year by 6.79%, which is quite nice.
HRB has been paying a dividend for at least 10 years, so it has 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)6.79%
Div Incr Years9
Div Non Decr Years27
5.3 Sustainability
32.86% of the earnings are spent on dividend by HRB. This is a low number and sustainable payout ratio.
HRB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP32.86%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
51.22
-0.91 (-1.75%)
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 Change2.79%
Market Cap6.86B
Analysts50.91
Price Target56.1 (9.53%)
Short Float %7.74%
Short Ratio6.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.22% |
Yearly Dividend1.44
Dividend Growth(5Y)6.79%
DP32.86%
Div Incr Years9
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-8.81%
Min EPS beat(2)-20.65%
Max EPS beat(2)3.03%
EPS beat(4)2
Avg EPS beat(4)-5.84%
Min EPS beat(4)-20.65%
Max EPS beat(4)3.03%
EPS beat(8)6
Avg EPS beat(8)2.12%
EPS beat(12)9
Avg EPS beat(12)3.02%
EPS beat(16)13
Avg EPS beat(16)6.53%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)0.31%
Max Revenue beat(2)2.3%
Revenue beat(4)3
Avg Revenue beat(4)0.29%
Min Revenue beat(4)-3.34%
Max Revenue beat(4)2.3%
Revenue beat(8)6
Avg Revenue beat(8)1.16%
Revenue beat(12)8
Avg Revenue beat(12)1.47%
Revenue beat(16)12
Avg Revenue beat(16)2.69%
PT rev (1m)-14.06%
PT rev (3m)-14.06%
EPS NQ rev (1m)2.21%
EPS NQ rev (3m)1.48%
EPS NY rev (1m)-2.43%
EPS NY rev (3m)-2.43%
Revenue NQ rev (1m)1.33%
Revenue NQ rev (3m)1%
Revenue NY rev (1m)1.03%
Revenue NY rev (3m)1.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.78 | ||
| Fwd PE | 10.1 | ||
| P/S | 1.82 | ||
| P/FCF | 11.46 | ||
| P/OCF | 10.08 | ||
| P/B | 77.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.93 |
EPS(TTM)4.75
EY9.27%
EPS(NY)5.07
Fwd EY9.9%
FCF(TTM)4.47
FCFY8.73%
OCF(TTM)5.08
OCFY9.92%
SpS28.08
BVpS0.66
TBVpS-7.26
PEG (NY)1.6
PEG (5Y)0.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 675.51% | ||
| ROCE | 42.13% | ||
| ROIC | 32.95% | ||
| ROICexc | 65.95% | ||
| ROICexgc | N/A | ||
| OM | 22.01% | ||
| PM (TTM) | 15.97% | ||
| GM | 44.53% | ||
| FCFM | 15.92% |
ROA(3y)18.28%
ROA(5y)17.52%
ROE(3y)1016.86%
ROE(5y)695.21%
ROIC(3y)29.5%
ROIC(5y)27.67%
ROICexc(3y)56.68%
ROICexc(5y)50.15%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)37.72%
ROCE(5y)35.37%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y16.18%
ROICexc growth 5Y32.13%
OM growth 3Y0.78%
OM growth 5Y25.98%
PM growth 3Y0.25%
PM growth 5YN/A
GM growth 3Y-0.84%
GM growth 5Y4.86%
F-Score7
Asset Turnover1.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.86 | ||
| Debt/FCF | 2.49 | ||
| Debt/EBITDA | 1.21 | ||
| Cap/Depr | 70.22% | ||
| Cap/Sales | 2.18% | ||
| Interest Coverage | 11.09 | ||
| Cash Conversion | 72.07% | ||
| Profit Quality | 99.73% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 3.26 |
F-Score7
WACC8.37%
ROIC/WACC3.94
Cap/Depr(3y)58.64%
Cap/Depr(5y)50.63%
Cap/Sales(3y)1.98%
Cap/Sales(5y)1.86%
Profit Quality(3y)115.52%
Profit Quality(5y)116.11%
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)-0.87%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%4.55%
Revenue Next Year3.8%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
EBIT growth 1Y38.23%
EBIT growth 3Y3.59%
EBIT growth 5Y35.23%
EBIT Next Year15.26%
EBIT Next 3Y8.21%
EBIT Next 5YN/A
FCF growth 1Y-8.88%
FCF growth 3Y-7.08%
FCF growth 5Y85.45%
OCF growth 1Y-5.55%
OCF growth 3Y-5.57%
OCF growth 5Y44.25%