H&R Block Inc's Dividend Analysis
An In-Depth Look at H&R Block Inc's Upcoming Dividend and Historical Performance
H&R Block Inc (NYSE:HRB) recently announced a dividend of $0.32 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-03-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into H&R Block Inc's dividend performance and assess its sustainability.
What Does H&R Block Inc Do?
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H&R Block Inc provides income tax return preparation services, digital do-it-yourself tax solutions, and other services related to income tax preparation to the general public primarily in the United States, Canada, and Australia. The company mainly prepares tax returns for customers within the United States through its company-owned offices, franchise locations, and online tax software. The vast majority of H&R Block's offices are located in the U.S. The company derives most of its total revenue from the U.S. assisted tax preparation fees. Revenue from franchise and product royalties and digital do-it-yourself tax solutions is also relatively significant.
A Glimpse at H&R Block Inc's Dividend History
H&R Block Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Additionally, H&R Block Inc has increased its dividend each year since 1998, earning the status of a dividend aristocrata prestigious recognition for companies that have consistently increased their dividends for at least 25 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down H&R Block Inc's Dividend Yield and Growth
As of today, H&R Block Inc currently has a 12-month trailing dividend yield of 2.53% and a 12-month forward dividend yield of 2.66%. This indicates an expectation of increased dividend payments over the next 12 months. Over the past three years, H&R Block Inc's annual dividend growth rate was 3.70%, which decreased to 3.40% per year over a five-year period. Over the past decade, H&R Block Inc's annual dividends per share growth rate has been at 4.20%. Based on H&R Block Inc's dividend yield and five-year growth rate, the 5-year yield on cost of H&R Block Inc stock as of today is approximately 2.99%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, H&R Block Inc's dividend payout ratio is 0.31. H&R Block Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks H&R Block Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
For the sustainability of dividends, a company must have robust growth metrics. H&R Block Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. H&R Block Inc's revenue has increased by approximately 18.30% per year on average, outperforming about 82.47% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, H&R Block Inc's earnings increased by approximately 65.70% per year on average, outperforming about 93.06% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 12.50%, outperforms about 69.57% of global competitors.
Concluding Thoughts on H&R Block Inc's Dividend Prospects
In conclusion, H&R Block Inc's upcoming dividend, consistent growth in dividend payments, and a sensible payout ratio paired with high profitability and strong growth metrics paint a promising picture for current and prospective shareholders. These factors collectively suggest that H&R Block Inc is positioned to continue its legacy of rewarding investors with stable and growing dividends. As value investors consider adding this stock to their portfolios, they may find reassurance in the company's ability to maintain and potentially enhance shareholder value over time. For those seeking similar investment opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover high-dividend yield stocks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
