H&R BLOCK INC (HRB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRB - US0936711052 - Common Stock
40.04 USD
-0.58 (-1.43%)
40.07 USD
+0.03 (+0.07%)
We assign a fundamental rating of 6 out of 10 to HRB. HRB was compared to 76 industry peers in the Diversified Consumer Services industry. HRB has an excellent profitability rating, 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
- In the past year HRB was profitable.
- 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 has a better Return On Assets (23.16%) than 96.05% of its industry peers.
- The Return On Invested Capital of HRB (35.30%) is better than 98.68% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 10.15%.
- The 3 year average ROIC (29.50%) for HRB is below the current ROIC(35.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.16% | ||
| ROE | N/A | ||
| ROIC | 35.3% |
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
- The Profit Margin of HRB (16.10%) is better than 85.53% of its industry peers.
- In the last couple of years the Profit Margin of HRB has remained more or less at the same level.
- With an excellent Operating Margin value of 22.52%, HRB belongs to the best of the industry, outperforming 86.84% of the companies in the same industry.
- HRB's Operating Margin has improved in the last couple of years.
- The Gross Margin of HRB (44.56%) is comparable to the rest of the industry.
- HRB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.52% | ||
| PM (TTM) | 16.1% | ||
| GM | 44.56% |
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.
- HRB has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, HRB has less shares outstanding
- HRB has a better debt/assets ratio than last year.
2.2 Solvency
- HRB has an Altman-Z score of 3.06. This indicates that HRB is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of HRB (3.06) is better than 72.37% of its industry peers.
- The Debt to FCF ratio of HRB is 3.01, which is a good value as it means it would take HRB, 3.01 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.01, HRB is in the better half of the industry, outperforming 76.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.01 | ||
| Altman-Z | 3.06 |
ROIC/WACC4.55
WACC7.75%
2.3 Liquidity
- A Current Ratio of 0.76 indicates that HRB may have some problems paying its short term obligations.
- The Current ratio of HRB (0.76) is worse than 71.05% of its industry peers.
- A Quick Ratio of 0.76 indicates that HRB may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.76, HRB is doing worse than 67.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.52% 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 -0.88% in the last year.
- The Revenue has been growing slightly by 7.34% on average over the past years.
EPS 1Y (TTM)7.52%
EPS 3Y8.29%
EPS 5Y43.89%
EPS Q2Q%-2.56%
Revenue 1Y (TTM)-0.88%
Revenue growth 3Y2.79%
Revenue growth 5Y7.34%
Sales Q2Q%5.03%
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 11.96% yearly.
- 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 Y5.04%
EPS Next 2Y8.21%
EPS Next 3Y11.96%
EPS Next 5YN/A
Revenue Next Year4.25%
Revenue Next 2Y3.69%
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
- The Price/Earnings ratio is 8.48, which indicates a very decent valuation of HRB.
- Based on the Price/Earnings ratio, HRB is valued cheaper than 86.84% of the companies in the same industry.
- When comparing the Price/Earnings ratio of HRB to the average of the S&P500 Index (27.21), we can say HRB is valued rather cheaply.
- With a Price/Forward Earnings ratio of 7.20, the valuation of HRB can be described as very cheap.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 94.74% 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 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.48 | ||
| Fwd PE | 7.2 |
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 78.95% of the companies listed in the same industry.
- 93.42% of the companies in the same industry are more expensive than HRB, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.79 | ||
| EV/EBITDA | 6.65 |
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.
PEG (NY)1.68
PEG (5Y)0.19
EPS Next 2Y8.21%
EPS Next 3Y11.96%
5. Dividend
5.1 Amount
- HRB has a Yearly Dividend Yield of 4.14%, which is a nice return.
- In the last 3 months the price of HRB has falen by -23.31%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.36, HRB pays a better dividend. On top of this HRB pays more dividend than 100.00% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, HRB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.14% |
5.2 History
- On average, the dividend of HRB grows each year by 6.79%, which is quite nice.
- HRB has paid a dividend for at least 10 years, which is 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
- 33.41% 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.
DP33.41%
EPS Next 2Y8.21%
EPS Next 3Y11.96%
H&R BLOCK INC / HRB FAQ
What is the fundamental rating for HRB stock?
ChartMill assigns a fundamental rating of 6 / 10 to HRB.
What is the valuation status for 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 8 / 10.
Can you provide the financial health for HRB stock?
The financial health rating of H&R BLOCK INC (HRB) is 5 / 10.
Can you provide the expected EPS growth for HRB stock?
The Earnings per Share (EPS) of H&R BLOCK INC (HRB) is expected to grow by 5.04% in the next year.