If You Invested $1000 in H&R Block 10 Years Ago, This Is How Much You'd Have Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in H&R Block (HRB) ten years ago? It may not have been easy to hold on to HRB for all that time, but if you did, how much would your investment be worth today?
H&R Block's Business In-Depth
With that in mind, let's take a look at H&R Block's main business drivers.
H&R Block Inc. is a leading provider of tax preparation services. The company provides assisted income tax return preparation, do-it-yourself (DIY) tax solutions and other products and services associated with income tax return preparation in the United States, Canada and Australia.
The company's assisted income tax return preparation services are provided through a system of retail offices operated directly by the company or by franchisees. H&R Block's DIY tax services include preparation of federal and state income tax returns, advice and tax-related news, access to tax tips, use of calculators for tax planning, and error checking and electronic filing. The company develops and markets DIY income tax preparation software online, and through third-party retail stores and direct mail. The company offers return preparation solutions through mobile applications as well.
Additional offerings from the company include Refund Transfers, H&R Block Emerald Advance lines of credit, Peace of Mind Extended Service Plan, Tax Identity Shield, H&R Block Emerald Prepaid MasterCard, and refund advance loans; POM, an Instant Cash Back refund option; and H&R Block Pay with Refund option.
H&R Block was organized as a corporation in 1955 under the laws of the State of Missouri and is headquartered in Kansas City, MO. The company has around 11,600 company-owned and franchise offices worldwide. As most of the clients file their tax returns from January through April of each year, most of H&R Block’s revenues from income tax return preparation and related services and products are received during this period. As a result, the Tax Services segment generally operates at a loss through the first nine months of a fiscal year.
H&R Block has a robust cash generation capacity, which allows it to pursue opportunities that exhibit true potential and positions it for sustainable clients, revenue and earnings growth.
In fiscal 2021, the company’s revenues of $3.41 billion increased 29.3% on a year-over-year basis.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For H&R Block, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in September 2012 would be worth $2,732.92, or a 173.29% gain, as of September 7, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 172.90% and gold's return of -6% over the same time frame.
Analysts are forecasting more upside for HRB too.
H&R Block looks well poised to gain from its five-year strategy known as Block Horizons. The company is expected to deliver sustainable revenues, operating profit growth and healthy returns on investments, while also maintaining a strong balance sheet and liquidity position in the foreseeable future. The main drivers of the company’s performance post the pandemic will be digital enablement of business, client addition and retention in both Assisted and DIY, greater usage of AI, along with machine learning for product improvement and expansion in small business. Partly due to these tailwinds, shares of H&R Block has increased in a year's time. However, escalating costs due to heavy investments in technology and operations might weigh on the company's bottom line. Seasonality causes considerable fluctuations in revenues.
The stock has jumped 12.60% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 4 higher, for fiscal 2022; the consensus estimate has moved up as well.
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