Why H&R Block Stock Jumped This Week
Key Points
H&R Block is a cash-generating machine.
Buybacks are giving stockholders a bigger piece of the profit pie.
- 10 stocks we like better than H&R Block ›
Shares of H&R Block (NYSE: HRB) rose more than 16% this past week after the tax preparation leader boosted its cash payments to investors.
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Gobbling up its own shares
H&R Block's revenue rose 4.9% year over year to $3.95 billion in its fiscal year ended June 30. The financial services purveyor's adjusted net income from continuing operations, in turn, climbed 6.9% to $688 million.
"Research tells us that clients with more complex financial lives value assistance, expertise, and trusted advice," CEO Curtis Campbell said during a conference call with analysts. "This is exactly where H&R Block stands apart."
Yet it's H&R Block's per-share profit metrics that perhaps best highlight the benefits of its excellent cash generation capabilities.
The tax and small-business solutions provider used its strong free cash flow to repurchase nearly 8% of its outstanding shares at an average price of $47.48 per share in fiscal 2026. Going back to 2016, H&R Block has bought back a whopping 48% of its shares.
All told, the company's adjusted earnings per share from continuing operations jumped 13.9% to $5.31.
Investors can expect steadily growing cash payouts
Looking ahead to fiscal 2027, management guided for revenue of more than $4.1 billion and adjusted earnings per share of $6.04 to $6.24.
This healthy profitability enabled H&R Block to raise its quarterly dividend by 10% to $0.46 per share, marking its ninth straight annual increase. The income-paying stalwart has not missed a quarterly dividend payment since it became a public company way back in 1962.
"Entering fiscal 2027, we are well positioned to build on this momentum and continue delivering meaningful long-term value," chief financial officer Tiffany Mason said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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