The DJIA is near record highs. HRB is just over half its record high. It is considerably lower than where it was 5 years ago. Seems like dead money to me. It does pay a dividend so it's not completely dead, but when the stock price depreciates by nearly half over eleven years, that's not the sign of a healthy company. There don't seem to be terribly healthy companies in this industry. Are tax companies going the way of the blacksmiths?
Please forgive me, but I.m don't feel like checking any dates tonite. Hopefully I won't miss the timeline too badly.
I suspect that you are making the classic mistake of comparing apples to oranges. Specifically, you are comparing HRB to HRB/Option One Mortgage. (plus HRB Bank, their accounting firm, etc).
I can't remember for sure, but is seems that at least one high was reached at some point while HRB and OO were combined
You would have a much better point if you were dealing with the effect of the FFA, combined with boxed and online software.
It's all one company, HRB, regardless of the assets they had and/or lost. But yes, the company got into some horrible lines of business that destroyed a lot of value. They traded up near $30 and then dropped to the $11 range before recovering a bit. But the DJIA is still at over 90% of its all time high. Through what ever activities it has engaged, Block is at 55%. Yes, it bought Option One, but it's not like it sold it for anything. I'm just wondering at what point an investor decides it is dead money and moves on. The dividend is the only thing making it in the least pallatable.
The stock price of HRB has changed a lot because the fundamental company has changed over the year. They bought and sold parts of the company. Got into mortgages and other financial products and then sold them later.
Looking at just their tax business though you still see issues. They tried expanding the number of stores but didn't increase revenue. They just increased expenses. So now they are working to reduce the number of stores. They started the "Free" 1040EZ program. Jury is still out on its long term viability to generate revenue. They have at least stopped the ongoing drop in numbers of returns.
They still generate lots of cash but won't be priced like a growth stock. The three major players in the tax industry all have different issues that are affecting their stock and values. HRB has struggled with having a clear direction in the past few years which as led to declining profit and loss of returns. Jackson Hewitt was over leveraged from a debt standpoint. They didn't handle the RAL issue well in many states and lost a lot of customers over it. They have since gone private but don't appear to have solved any of their fundamental issues.
Liberty (TAX) has a very low float on their stock. It fluctuates due to that low volume. As the new publicly traded kid on the block many people don't have an idea of what they can or will do. This coming tax season will be interesting from that standpoint.
Last year was a tough year for many tax companies. Only time will tell if it bounced back this coming year or waits until the Affordable Care Act requirements kick in to really boost up revenue and returns.