Full access to Entrepreneur for $5
Subscribe

Reasons to Retain H&R Block (HRB) Stock in Your Portfolio

H&R Block's (HRB) Block Horizons strategy is expected to help the company deliver sustainable revenues and operating profit growth.

By
This story originally appeared on Zacks

H&R Block, Inc. HRB has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. The company has an expected long-term (three to five years) earnings per share growth rate of 12.5%.

- Zacks

The stock has gained a huge 73.4% over the past year against 13.1% decline of the industry it belongs to.

Factors That Auger Well

H&R Block has a five-year strategy called Block Horizons in place. The strategy is focused on using human expertise and technological infrastructure to drive innovation. It aims at building strong relationships with small businesses through Wave and Block Advisors, developing Emerald Card as a consumer-centric, mobile-first solution for the underbanked, and making taxation faster and more personalized through integrating human expertise with digital tools. Block Horizons is expected to help the company deliver sustainable revenues and operating profit growth, improve return on investments, and maintain a strong balance sheet and liquidity position.

H&R Block has a consistent track record of returning capital to shareholders through dividends and share repurchases. The company paid $195.1 million, $204.9 million and $205.5 million as dividends in the 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.

Debt Woe Stays

H&R Block’s cash and cash equivalent balance of $1.06 billion at the end of the fourth-quarter fiscal 2021 was well below the debt level of $1.49 billion, underscoring that the company doesn’t have enough cash to meet its debt burden.

Zacks Rank and Stocks to Consider

H&R Block currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Consumer Discretionary sector are BJ's Wholesale Club BJ, Lifetime Brands LCUT and Sonos SONO, each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for BJ's Wholesale Club, Lifetime Brands and Sonos is 8.2%, 14% and 41.9%, respectively.



Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

BJs Wholesale Club Holdings, Inc. (BJ): Free Stock Analysis Report

 

H&R Block, Inc. (HRB): Free Stock Analysis Report

 

Sonos, Inc. (SONO): Free Stock Analysis Report

 

Lifetime Brands, Inc. (LCUT): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research