A wise investment decision involves buying well-performing stocks at the right time, while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
H&R Block, Inc. (HRB - Free Report) is a consumer services stock that has performed well so far this year and has the potential to carry the momentum forward. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes H&R Block an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past three months. H&R Block has returned 11.6% against the industry’s decline of 12.4%.
Solid Rank: H&R Block has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Three estimates for 2018 moved north over the past 60 days, while there was no southbound revision. This reflects analysts’ confidence in the company. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 1.6% upward.
Impressive Earnings Surprise History: H&R Block has a solid earnings surprise history. The company outpaced the consensus mark in each of the trailing four quarters, with an average beat of 6.9%.
H&R Block, Inc. Price and EPS Surprise
Growth Drivers: The tax industry is growing steadily since 2005, in both assisted and DIY channels, and the momentum is expected to continue in the years to come. H&R Block has taken steps to leverage on opportunities offered by the industry. In its assisted business, the company is focused on investment in price, developing and delivering on a clear brand promise, and enhancing service delivery. In the DIY business, H&R Block continues to focus on product innovation and user experience improvement.
The company is investing in three broad areas— price, technology and operational excellence. On the price front, it is focusing on price reduction to attain competitive pricing. With technology, H&R Block is building a new tax engine to consolidate multiple systems, invest in cross-channel capabilities to streamline client experience across platforms, move its physical data centers to the cloud, and optimize data architecture and analytics platform. With regard to operational excellence, the company is trying to improve execution of standard operating procedures for better quality and consistency of service delivery.
Moreover, a strong cash position allows H&R Block to pursue opportunities that exhibit true potential, and helps it to sustain clients, revenues and earnings growth.
Other Key Picks
Some other top-ranked stocks in the broader Business Services sector include Core-Mark Holding Company (CORE - Free Report) , Envestnet, Inc. (ENV - Free Report) and Paychex (PAYX - Free Report) . While Core-Mark sports a Zacks Rank #1, Envestnet and Paychex carry a Zacks Rank #2.
The long-term expected earnings per share growth rate for Core-Mark, Envestnet and Paychex is 13%, 14.3% and 8.4%, respectively.
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