Yahoo Finance Introducing H&R Block (NYSE:HRB), The Stock That Dropped 20% In The Last Five Years
Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. At this point some shareholders may be questioning their investment in H&R Block, Inc. (NYSE:HRB), since the last five years saw the share price fall 20%. It's down 1.1% in the last seven days.
See our latest analysis for H&R Block
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
While the share price declined over five years, H&R Block actually managed to increase EPS by an average of 3.5% per year. So it doesn't seem like EPS is a great guide to understanding how the market is valuing the stock. Alternatively, growth expectations may have been unreasonable in the past. With EPS gaining and a declining share price, one would suggest the market is cooling on its view of the company. That said, if EPS continues to increase, it seems very likely the share price will get a boost, in the long term.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It might be well worthwhile taking a look at our free report on H&R Block's earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for H&R Block the TSR over the last 5 years was -5.5%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
We're pleased to report that H&R Block shareholders have received a total shareholder return of 7.0% over one year. That's including the dividend. That certainly beats the loss of about 1.1% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. Before spending more time on H&R Block it might be wise to click here to see if insiders have been buying or selling shares.
Of course H&R Block may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
