Back to top

Bull of the Day: H&R Block (HRB)

Read MoreHide Full Article

Headquartered in Kansas City, MO, H&R Block (HRB - Free Report) is a global consumer tax services provider. They have approximately 12,000 company-owned and franchise retail locations and 9,000 bilingual tax professionals and client service professionals in the US, other US territories, and on US military bases around the world. An H&R Block office is located within five miles of most Americans in addition to their online solutions.

Excellent Results

The company reported excellent results earlier this month as they appear to be benefitting from tightening labor markets and improving wages. Their Q4 FY 2017 ended Apr 30 adjusted earnings were $3.76 per share, ahead of the Zacks Consensus Estimate of $3.51.

“With competitive promotions, impactful marketing and an improved client experience, we achieved this goal and also produced strong financial results, all during a year in which the industry experienced a decline in returns," said the CEO.

Rising Estimates

Estimates have gone up significantly after excellent results. Zacks Consensus Estimates for the current and next year have gone up to $2.00 per share and $2.05 per share from $1.81 and $1.87 respectively, before the results. Rising estimates sent the stock back to a Zacks Rank #1 (Strong Buy).


H&R Block, Inc. Price and Consensus

H&R Block, Inc. Price and Consensus | H&R Block, Inc. Quote


Return Capital to Shareholders

The company continues to return cash to shareholders via dividends and share buybacks. With the results, they announced an increase in their quarterly dividend by 9%. This was a significant increase in their quarterly dividend for the second year in a row.

Since 2005, their dividends per share have grown at 6% CAGR, even though there were no dividend increases in FY14, FY15 and a portion of FY16 due to savings and loan holding company regulatory constraints.

The company has been paying quarterly dividends to its shareholders since going public in 1962. Their current dividend yield is 3.1%.

The Bottom Line

HRB is a Zacks Rank #1 (Strong Buy) stock with Zacks Style Scores of “A” for Value as well as Growth and “B” for Momentum, with a VGM Score of “A”. It looks pretty good from industry and sector rank perspective look, which are in the top 8% and 31% respectively.

Going forward, they should also benefit from tax reforms promised by the Trump administration.

5 Trades Could Profit "Big-League" from Trump Policies                                                                                                           

If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.


Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>

In-Depth Zacks Research for the Tickers Above

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

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

More from Zacks Bull of the Day

You May Like