Here's Why Investors Should Retain H&R Block (HRB) Stock Now
Zacks Investment Research | Sep 02, 2019 10:46PM ET
A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.
We believe H&R Block, Inc. (NYSE:HRB) with long-term expected EPS growth rate of 10% and a market cap of $4.9 billion is one such stock and investors should retain it in their portfolios.
Factors That Bode Well
The U.S. government’s tax reform that led to lower tax rates and simpler codes reduced the demand for H&R Block’s assisted tax preparation services. The business suffered post tax reform, leaving an adverse impact on the stock price, which has declined 5.9% in a year.
Currently, management expects betterment in the tax business, which along with contribution from the acquisition of Wave Financial, is expected to help the company grow its top line by 1.5% to 3.5% in the current fiscal year. The Wave Acquisition has expanded H&R Block's product and client portfolio and strengthened its position in the large and expanding small business market.
Additionally, cost reductions are expected to offset operating losses from Wave acquisition, thus positively impacting margin. Expansion of digital offerings in new areas is helping the company to attract and retain new clients, positively impacting earnings growth.
Zacks Rank and Stocks to Consider
H&R Block currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.