Our analysis is based on comparing H&R Block, Inc. with the following peers – Intuit Inc., CBIZ, Inc., Automatic Data Processing, Inc., Western Union Company, PRGX Global, Inc., Liberty Tax, Inc. Class A, Blucora, Inc. and MoneyGram International, Inc. (INTU-US, CBZ-US, ADP-US, WU-US, PRGX-US, TAX-US, BCOR-US and MGI-US).
H&R Block, Inc.’s dividend yield is 2.19 percent and its dividend payout is 46.07 percent. This compares to a peer median dividend yield of 2.19 percent and a payout level of 51.43 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100, underscores its attractiveness for dividend investors.
Dividend Quality Overview
- Over the last twelve months (prior to April 30, 2017), HRB-US paid a high quality dividend, which represents a yield of 2.92% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 5.97x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to April 30, 2017), HRB-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.95x), investing cash flow (coverage of 0.53x), issuance cash flow (coverage of -1.83x) and twelve-month prior cash (coverage of 5.35x), for a total dividend coverage of 6.97x.
HRB-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -1.71x). Thus, the total coverage including share buybacks is 8.69x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||2.87||2.81||2.64||4.52||3.64||2.19|
|Dividend Payout (%)||50.63||46.51||46.78||53.69||46.07||46.07|
A complete list of metrics and analysis is available on the company page.
H&R Block, Inc. provides tax preparation and banking services. Through its subsidiaries, it offers assisted and do-it-yourself (DIY) tax return preparation through multiple channels (including in-person, online and mobile applications, and desktop software) and distribute the H&R Block-branded financial products and services of BofI. The company was founded by Henry W. Bloch and Richard L. Bloch on January 25, 1955 and is headquartered in Kansas City, MO.
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