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Here's Why H&R Block (HRB) is an Attractive Pick Right Now
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H&R Block (HRB - Free Report) has had an impressive run over the past six months, gaining 37.9% and outperforming its industry’s 9.9% growth and the S&P 500 composite’s 6.1% gain during the same time frame.
Reasons Why HRB is an Attractive Pick Now
Solid Rank: HRB currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, when combined with a VGM Score of A or B, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise: H&R Block has had an impressive earnings surprise history in the past four quarters, having beaten the Zacks Consensus Estimate in three of the previous four quarters and missing on one instance, the average surprise being 4%.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For fiscal 2024, the Zacks Consensus Estimate for earnings is pegged at $4.2 per share, up 10% from the year-ago figure. This has been revised slightly northward in the past 60 days.
Bullish Industry Rank: The industry, to which H&R Block belongs, currently has a Zacks Industry Rank of 59 (of 251 groups). Such a solid rank places the industry in the top 24% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
A mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: H&R Block consistently demonstrates its commitment to enhancing shareholder value through a consistent track record of returning capital. In the fiscal years 2022, 2021 and 2020, the company paid dividends of $186.5 million, $195.1 million and $204.9 million, respectively. It also engaged in share repurchases totaling $563.2 million, $191.3 million and $256.2 million in the same time period. These financial strategies not only inspire confidence among investors but also have a positive impact on earnings per share, thus showcasing the company's confidence in its business.
Furthermore, H&R Block is expanding beyond its core tax preparation services by introducing new offerings such as Refund Transfers, H&R Block Emerald Prepaid Mastercard, Peace of Mind Extended Service Plan, Tax Identity Shield, Refund Advance Loans and Small Business Financial Solutions. This diversification reflects the company's proactive approach to evolving its services and broadening its market presence.
Other Stocks to Consider
The following other top-ranked stocks from the broader Business Services sector are also worth consideration:
The Zacks Consensus Estimate for the company’s revenues for 2023 is pegged at $5.91 billion, up 7.9% from the year-ago figure. The consensus mark for earnings is pegged at $11.06 per share, which indicates a decline of 1.9%.
IT beat the consensus estimate in all of the past four quarters, with the average surprise being 34.4%.
Broadridge Financial Solutions (BR - Free Report) carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for the company’s revenues for 2023 is pegged at $6.53 billion, up 7.7% from the year-ago figure. The consensus mark for earnings is pegged at $7.72 per share, which indicates an increase of 10.1%.
BR beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 3.2%.
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Here's Why H&R Block (HRB) is an Attractive Pick Right Now
H&R Block (HRB - Free Report) has had an impressive run over the past six months, gaining 37.9% and outperforming its industry’s 9.9% growth and the S&P 500 composite’s 6.1% gain during the same time frame.
Reasons Why HRB is an Attractive Pick Now
Solid Rank: HRB currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, when combined with a VGM Score of A or B, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise: H&R Block has had an impressive earnings surprise history in the past four quarters, having beaten the Zacks Consensus Estimate in three of the previous four quarters and missing on one instance, the average surprise being 4%.
H&R Block, Inc. Price
H&R Block, Inc. price | H&R Block, Inc. Quote
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For fiscal 2024, the Zacks Consensus Estimate for earnings is pegged at $4.2 per share, up 10% from the year-ago figure. This has been revised slightly northward in the past 60 days.
Bullish Industry Rank: The industry, to which H&R Block belongs, currently has a Zacks Industry Rank of 59 (of 251 groups). Such a solid rank places the industry in the top 24% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
A mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: H&R Block consistently demonstrates its commitment to enhancing shareholder value through a consistent track record of returning capital. In the fiscal years 2022, 2021 and 2020, the company paid dividends of $186.5 million, $195.1 million and $204.9 million, respectively. It also engaged in share repurchases totaling $563.2 million, $191.3 million and $256.2 million in the same time period. These financial strategies not only inspire confidence among investors but also have a positive impact on earnings per share, thus showcasing the company's confidence in its business.
Furthermore, H&R Block is expanding beyond its core tax preparation services by introducing new offerings such as Refund Transfers, H&R Block Emerald Prepaid Mastercard, Peace of Mind Extended Service Plan, Tax Identity Shield, Refund Advance Loans and Small Business Financial Solutions. This diversification reflects the company's proactive approach to evolving its services and broadening its market presence.
Other Stocks to Consider
The following other top-ranked stocks from the broader Business Services sector are also worth consideration:
Gartner (IT - Free Report) currently carries Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the company’s revenues for 2023 is pegged at $5.91 billion, up 7.9% from the year-ago figure. The consensus mark for earnings is pegged at $11.06 per share, which indicates a decline of 1.9%.
IT beat the consensus estimate in all of the past four quarters, with the average surprise being 34.4%.
Broadridge Financial Solutions (BR - Free Report) carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for the company’s revenues for 2023 is pegged at $6.53 billion, up 7.7% from the year-ago figure. The consensus mark for earnings is pegged at $7.72 per share, which indicates an increase of 10.1%.
BR beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 3.2%.