6 Reasons to Add H&R Block (HRB) Stock to Your Portfolio Now
H&R Block, Inc. HRB has performed well in the past year and has shown the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s look at the factors that make the stock an attractive pick.
An Outperformer: Shares of HRB have surged 54.7% in the past year against the 26.7% drop of the industry it belongs to.
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Solid Rank & VGM Score: H&R Block currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, HRB seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The Zacks Consensus Estimate for 2022 earnings has moved up 7.5% in the past 60 days.
Positive Earnings Surprise History: H&R Block has an impressive earnings surprise history. HRB’s earnings outpaced the Zacks Consensus Estimate in the trailing three quarters, the average surprise being 21%.
Strong Prospects: The Zacks Consensus Estimate for 2022 revenues is pegged at $3.4 billion, indicating growth of 59.6% from the year-ago reported figure. Revenues are also expected to register 2.5% growth in 2023.
Driving Factors: H&R Block has a consistent track record of returning capital to its shareholders through dividends and share repurchases. HRB paid out $195.1 million, $204.9 million and $205.5 million each 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 each. Such moves indicate HRB’s commitment to create shareholder value and underline its confidence in its business. Moreover, these strategic actions raise investors’ optimism on the stock and drive the earnings per share.
H&R Block has a five-year strategy in place, known as Block Horizons. The strategy is focused on using human expertise and technological infrastructure to drive innovation. The strategy 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 by integrating human expertise with digital tools. Block Horizons is expected to help HRB deliver sustainable revenues and operating profit growth, improve return on investments, and maintain a strong balance sheet and liquidity position.
Other Stocks to Consider
Investors interested in the broader Zacks Business Services sector can also consider stocks like Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRAI.
Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.
Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.
Genpact sports a Zacks Rank of 1 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average.
CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.
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Charles River Associates (CRAI) : Free Stock Analysis Report
Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
H&R Block, Inc. (HRB) : Free Stock Analysis Report
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