On Feb 26, 2014, shares of
H&R Block, Inc.
) reached a new 52-week high of $32.42. The momentum was driven
by increase in market share in the digital online business and
exposure to international operations.
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H&R Block has updated its online tax preparation business by
introducing a new user interface. This enhancement helps
taxpayers to easily complete their taxes online. With the
increased usage of online devices to perform regular activities,
this is expected to draw more customers for the company, thereby
making way for revenue generation.
Moreover, the launch of Remote Service - that simplifies the tax
procedure for U.S. citizens residing abroad - also broadens the
portfolio of the company, enhancing its clientele base.
Further, the company is focused on enhancing its core tax
operations. Toward this end, H&R Block has decided to sell
H&R Block Bank through an agreement with Republic Bank and
Trust Company. Post the divestiture, H&R Block will not
remain a savings and loan holding company and therefore will not
be subjected to the Federal Reserve Bank regulations.
Moreover, the implementation of Affordable Care Act is expected
to help the company gain customers as it requires all Americans
to have health insurance by 2014 or pay a penalty through their
2014 tax return.
H&R Block has been consistent in enhancing shareholders'
value through dividend payouts and share repurchases. It bought
back 21.3 million shares for $315 million in 2013. It has also
been paying regular dividends. Its current quarterly dividend of
20 cents per share translates into a dividend yield of 2.83% that
exceeds the industry average of 2.09%.
The stock gained almost 33% over a 1-year period. The overall
long-term earnings growth rate for this stock is projected at
H&R Block currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the financial services space include
Discover Financial Services
Euronet Worldwide Inc.
World Acceptance Corp.
). All three stocks carry a Zacks Rank #2 (Buy).