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Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

Zacks Equity Research
·2 min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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H&R Block (HRB)

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.

HRB is a Zacks Rank #2 (Buy) stock, with a Value Style Score of A and VGM Score of B. Shares are currently trading at a forward P/E of 11.9X for the current fiscal year compared to the Consumer Services - Miscellaneous industry's P/E of 11.5X. Additionally, HRB has a PEG Ratio of 1 and a Price/Cash Flow ratio of 9.6X. Value investors should also note HRB's Price/Sales ratio of 2.1X.

A company's earnings performance is important for value investors as well. For fiscal 2023, four analysts revised their earnings estimate higher in the last 60 days for HRB, while the Zacks Consensus Estimate has increased $0.29 to $3.78 per share. HRB also holds an average earnings surprise of 19.2%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding HRB to their portfolios.


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Zacks Investment Research