Reasons to keep H&R Block (HRB) stocks in your portfolio – September 1, 2021
H&R Block, Inc. (HRD – Free Report) has an impressive growth score of A. This style score condenses all the essential measures of a company’s financial statements to get a clear idea of the quality and sustainability of its growth. The company has an expected long-term (three to five year) earnings per share growth rate of 12.5%.
The stock has gained a whopping 73.4% in the past year, compared to a 13.1% drop in the industry it belongs to.
Factors that form well
H&R Block has implemented a five-year strategy called Block Horizons. The strategy focuses on using human expertise and technological infrastructure to drive innovation. It aims to build strong relationships with small businesses through Wave and Block Advisors, develop Emerald Card as a consumer-centric mobile solution for the underbanked, and make taxation faster and more personalized by integrating the human expertise in digital tools. Block Horizons is expected to help the company generate sustainable revenue and operating profit growth, improve return on investment, and maintain a strong balance sheet and liquidity position.
H&R Block has a consistent history of returning capital to shareholders through dividends and share buybacks. The company paid $ 195.1 million, $ 204.9 million and $ 205.5 million in dividends during fiscal years 2021, 2020 and 2019, respectively. It repurchased shares worth $ 191.3 million, $ 256.2 million and $ 189.9 million respectively in 2021, 2020 and 2019.
The misfortune of debt remains
H&R Block’s cash and cash equivalents balance of $ 1.06 billion at the end of the fourth quarter of fiscal 2021 was well below the debt level of $ 1.49 billion, highlighting that the company does not have enough cash to meet its debt burden.
Zacks rank and actions to consider
H&R Block currently wears a Zacks Rank # 3 (Hold).
You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
Some actions better ranked in the Consumer discretionary sector are BJ Wholesale Club (BJ – Free report), Lifetime brands (LCUT – Free report) and His bone (SO NO – Free Report), each carrying a Zacks Rank # 2 (Buy).
The expected long-term growth rate in earnings per share (three to five years) for BJ’s Wholesale Club, Lifetime Brands and Sonos is 8.2%, 14% and 41.9%, respectively.