Here’s why shares of H&R Block (HRB) have gained 70.3% over the past year

Shares of H&R Block, Inc.HRB rose 70.3% over the past year versus the industry’s 21.6% drop.

Upside down reasons

H&R Block has implemented a five-year strategy, known as Block Horizons. The strategy focuses on using human expertise and technological infrastructure to drive innovation. The strategy aims to build strong relationships with small businesses through Wave and Block Advisors, develop Emerald Card as a consumer-focused mobile solution for the underbanked, and make taxation faster and more personalized by integrating human expertise with digital tools.

Block Horizons is expected to help HRB deliver sustainable revenue and operating profit growth, improve return on investment, and maintain a strong balance sheet and liquidity position.

H&R Block has a consistent track record of returning capital to its shareholders through dividends and share buybacks. HRB paid $195.1 million, $204.9 million, and $205.5 million in dividends in fiscal years 2021, 2020, and 2019, respectively.

It repurchased shares worth $191.3 million, $256.2 million, and $189.9 million, respectively, in fiscal 2021, 2020, and 2019. These actions underscore the commitment of HRB to create value for its shareholders and inspire its confidence in its business. This not only boosts investor optimism about the stock, but also bolsters earnings per share.

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Favorable revision of the estimate

Buoyed by the tailwinds above, Zacks’ consensus estimate for current-year earnings rose 8.3% to $3.78 per share in the past 90 days.

Zacks Ranking and Other Stocks to Consider

H&R Block currently sports a Zacks rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.

Investors interested in Zacks’ broader business services sector may also consider other blue chip stocks such as Avis Budget Group, Inc. CAR, Automatic Data Processing, Inc. ADP and CRA International, Inc. CRA.

Budget Reviews currently sports a Zacks rank of 1. CAR has an expected earnings growth rate of 109.1% for 2022.

Avis Budget recorded an earnings surprise for the last four quarters of 69.5% on average.

ADP wears a Zacks Rank #2 (Buy) at present. ADP expects long-term earnings growth of 12%.

ADP recorded a surprise on earnings for the last four quarters of 5% on average.

ARC International currently has a Zacks rank of 2. CRAI forecasts long-term earnings growth of 14.3%.

CRAI recorded a surprise on earnings for the last four quarters of 26%, on average.

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