H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - NYSE:HRB - US0936711052 - Common Stock
51.45 USD
+0.87 (+1.72%)
51 USD
-0.45 (-0.87%)
We assign a fundamental rating of 7 out of 10 to HRB. HRB was compared to 78 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 valued quite cheap, while showing a decent growth score. This is a good combination! Finally HRB also has an excellent dividend rating. These ratings would make HRB suitable 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.
HRB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HRB's Return On Assets of 18.40% is amongst the best of the industry. HRB outperforms 93.59% of its industry peers.
The Return On Equity of HRB (675.51%) is better than 100.00% of its industry peers.
HRB has a Return On Invested Capital of 32.95%. This is amongst the best in the industry. HRB outperforms 98.72% of its industry peers.
HRB had an Average Return On Invested Capital over the past 3 years of 29.50%. This is significantly above the industry average of 9.50%.
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
With an excellent Profit Margin value of 15.97%, HRB belongs to the best of the industry, outperforming 87.18% of the companies in the same industry.
HRB's Profit Margin has been stable in the last couple of years.
HRB's Operating Margin of 22.01% is amongst the best of the industry. HRB outperforms 87.18% of its industry peers.
In the last couple of years the Operating Margin of HRB has grown nicely.
HRB has a Gross Margin (44.53%) which is in line with its industry peers.
In the last couple of years the Gross Margin of HRB has grown nicely.
| 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
HRB has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HRB has less shares outstanding
HRB has less shares outstanding than it did 5 years ago.
HRB has a better debt/assets ratio than last year.
2.2 Solvency
HRB has an Altman-Z score of 3.17. This indicates that HRB is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.17, HRB is doing good in the industry, outperforming 79.49% of the companies in the same industry.
HRB has a debt to FCF ratio of 2.49. This is a good value and a sign of high solvency as HRB would need 2.49 years to pay back of all of its debts.
HRB has a better Debt to FCF ratio (2.49) than 74.36% of its industry peers.
HRB has a Debt/Equity ratio of 12.86. This is a high value indicating a heavy dependency on external financing.
HRB's Debt to Equity ratio of 12.86 is on the low side compared to the rest of the industry. HRB is outperformed by 82.05% of its industry peers.
Even though the debt/equity ratio score it not favorable for HRB, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.86 | ||
| Debt/FCF | 2.49 | ||
| Altman-Z | 3.17 |
ROIC/WACC4.17
WACC7.9%
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 worse Current ratio (0.90) than 64.10% of its industry peers.
A Quick Ratio of 0.90 indicates that HRB may have some problems paying its short term obligations.
HRB's Quick ratio of 0.90 is on the low side compared to the rest of the industry. HRB is outperformed by 61.54% of its industry peers.
| 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.
HRB shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 43.89% yearly.
HRB shows a decrease in Revenue. In the last year, the revenue decreased by -0.87%.
HRB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.34% yearly.
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
The Earnings Per Share is expected to grow by 12.47% on average over the next years. This is quite good.
Based on estimates for the next years, HRB will show a small growth in Revenue. The Revenue will grow by 3.32% on average per year.
EPS Next Y5.25%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
EPS Next 5YN/A
Revenue Next Year4.28%
Revenue Next 2Y3.76%
Revenue Next 3Y3.32%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.83, the valuation of HRB can be described as reasonable.
85.90% of the companies in the same industry are more expensive than HRB, based on the Price/Earnings ratio.
HRB's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.67.
HRB is valuated reasonably with a Price/Forward Earnings ratio of 10.29.
Based on the Price/Forward Earnings ratio, HRB is valued cheaply inside the industry as 89.74% of the companies are valued more expensively.
HRB's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 31.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.83 | ||
| Fwd PE | 10.29 |
4.2 Price Multiples
76.92% of the companies in the same industry are more expensive than HRB, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, HRB is valued cheaply inside the industry as 87.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.99 | ||
| EV/EBITDA | 7.39 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HRB does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of HRB 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)2.06
PEG (5Y)0.25
EPS Next 2Y7.99%
EPS Next 3Y12.47%
5. Dividend
5.1 Amount
HRB has a Yearly Dividend Yield of 3.31%.
Compared to an average industry Dividend Yield of 2.04, HRB pays a better dividend. On top of this HRB pays more dividend than 98.72% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, HRB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
5.2 History
The dividend of HRB is nicely growing with an annual growth rate of 6.79%!
HRB has been paying a dividend for at least 10 years, so it has a reliable track record.
HRB has not decreased their dividend for at least 10 years, which is a reliable track record.
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.
The dividend of HRB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP32.86%
EPS Next 2Y7.99%
EPS Next 3Y12.47%
51.45
+0.87 (+1.72%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.26%
Inst Owner Change-1.56%
Ins Owners0.95%
Ins Owner Change4.37%
Market Cap6.58B
Revenue(TTM)3.76B
Net Income(TTM)600.50M
Analysts50.91
Price Target56.1 (9.04%)
Short Float %9.58%
Short Ratio8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
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)0%
PT rev (3m)-14.06%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.83 | ||
| Fwd PE | 10.29 | ||
| P/S | 1.75 | ||
| P/FCF | 10.99 | ||
| P/OCF | 9.66 | ||
| P/B | 74.01 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.39 |
EPS(TTM)4.75
EY9.23%
EPS(NY)5
Fwd EY9.72%
FCF(TTM)4.68
FCFY9.1%
OCF(TTM)5.32
OCFY10.35%
SpS29.41
BVpS0.7
TBVpS-7.61
PEG (NY)2.06
PEG (5Y)0.25
Graham Number8.62
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%
ROICexgc growth 3YN/A
ROICexgc 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 | 3.17 |
F-Score7
WACC7.9%
ROIC/WACC4.17
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 Y5.25%
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 Year4.28%
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 Year14.81%
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%
H&R BLOCK INC / HRB FAQ
What is the fundamental rating for HRB stock?
ChartMill assigns a fundamental rating of 7 / 10 to HRB.
What is the valuation status of H&R BLOCK INC (HRB) stock?
ChartMill assigns a valuation rating of 8 / 10 to H&R BLOCK INC (HRB). This can be considered as Undervalued.
How profitable is H&R BLOCK INC (HRB) stock?
H&R BLOCK INC (HRB) has a profitability rating of 9 / 10.
What is the expected EPS growth for H&R BLOCK INC (HRB) stock?
The Earnings per Share (EPS) of H&R BLOCK INC (HRB) is expected to grow by 5.25% in the next year.
Is the dividend of H&R BLOCK INC sustainable?
The dividend rating of H&R BLOCK INC (HRB) is 8 / 10 and the dividend payout ratio is 32.86%.