Back to top

Image: Bigstock

Are Investors Undervaluing H&R Block (HRB) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is H&R Block (HRB - Free Report) . HRB is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 11.42, while its industry has an average P/E of 13.98. Over the past 52 weeks, HRB's Forward P/E has been as high as 14.59 and as low as 11.42, with a median of 12.42.

Investors will also notice that HRB has a PEG ratio of 1.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HRB's industry has an average PEG of 1.26 right now. Over the past 52 weeks, HRB's PEG has been as high as 1.46 and as low as 1.14, with a median of 1.24.

Finally, investors will want to recognize that HRB has a P/CF ratio of 8. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.19. HRB's P/CF has been as high as 10.15 and as low as 5.62, with a median of 8.24, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that H&R Block is likely undervalued currently. And when considering the strength of its earnings outlook, HRB sticks out at as one of the market's strongest value stocks.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


H&R Block, Inc. (HRB) - free report >>

Published in