H&R BLOCK INC (HRB) Stock Fundamental Analysis
NYSE:HRB - New York Stock Exchange, Inc. - US0936711052 - Common Stock - Currency: USD
HRB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 71 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 is valued quite cheap, but it does not seem to be growing. 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.
HRB had a positive operating cash flow in the past year.
HRB had positive earnings in 4 of the past 5 years.
In the past 5 years HRB always reported a positive cash flow from operatings.
1.2 Ratios
HRB's Return On Assets of 17.23% is amongst the best of the industry. HRB outperforms 94.37% of its industry peers.
HRB has a better Return On Invested Capital (38.40%) than 98.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HRB is significantly above the industry average of 10.64%.
The 3 year average ROIC (27.24%) for HRB is below the current ROIC(38.40%), indicating increased profibility in the last year.
| 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's Profit Margin of 15.06% is amongst the best of the industry. HRB outperforms 87.32% of its industry peers.
HRB's Profit Margin has improved in the last couple of years.
The Operating Margin of HRB (21.75%) is better than 90.14% 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.
In the last couple of years the Gross Margin of HRB has remained more or less at the same level.
| 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
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.
The number of shares outstanding for HRB has been reduced compared to 5 years ago.
Compared to 1 year ago, HRB has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.06 indicates that HRB is not in any danger for bankruptcy at the moment.
HRB has a better Altman-Z score (3.06) than 67.61% of its industry peers.
The Debt to FCF ratio of HRB is 2.30, which is a good value as it means it would take HRB, 2.30 years of fcf income to pay off 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 77.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.3 | ||
| Altman-Z | 3.06 |
ROIC/WACC4.63
WACC8.29%
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 64.79% 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 64.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
HRB shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.42%.
The Earnings Per Share has been growing by 15.54% on average over the past years. This is quite good.
The Revenue has decreased by -1.36% in the past year.
The Revenue has been growing slightly by 3.13% on average over the past years.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.84, HRB is valued correctly.
85.92% 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 27.30.
Based on the Price/Forward Earnings ratio of 10.80, the valuation of HRB can be described as reasonable.
HRB's Price/Forward Earnings ratio is rather cheap when compared to the industry. HRB is cheaper than 87.32% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HRB to the average of the S&P500 Index (21.76), we can say HRB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.84 | ||
| Fwd PE | 10.8 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRB is valued a bit cheaper than the industry average as 74.65% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HRB is valued cheaper than 87.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.59 | ||
| EV/EBITDA | 8.99 |
4.3 Compensation for Growth
HRB's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HRB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.73
PEG (5Y)0.83
EPS Next 2Y7.34%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.67%, 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 3.98. HRB pays more dividend than 95.77% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, HRB has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
The dividend of HRB has a limited annual growth rate of 4.72%.
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)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 2Y7.34%
EPS Next 3Y8.67%
56.13
-0.63 (-1.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners98.19%
Inst Owner Change0%
Ins Owners0.85%
Ins Owner Change-1.79%
Market Cap7.51B
Analysts50.91
Price Target65.28 (16.3%)
Short Float %8.95%
Short Ratio8.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
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)2.67%
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 | 12.84 | ||
| Fwd PE | 10.8 | ||
| P/S | 2.02 | ||
| P/FCF | 11.59 | ||
| P/OCF | 10.3 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.99 |
EPS(TTM)4.37
EY7.79%
EPS(NY)5.2
Fwd EY9.26%
FCF(TTM)4.84
FCFY8.63%
OCF(TTM)5.45
OCFY9.71%
SpS27.73
BVpS-1.44
TBVpS-9.33
PEG (NY)0.73
PEG (5Y)0.83
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 | 3.06 |
F-Score7
WACC8.29%
ROIC/WACC4.63
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%