H&R Block Stock Soars on Buybacks and Dividend Hike

Shares of H&R Block (HRB) jumped more than 16% this week after the tax preparation company announced strong fiscal 2026 results and boosted its shareholder returns. The company reported revenue of $3.95 billion, up 4.9% from the prior year, and adjusted net income from continuing operations rose 6.9% to $688 million.

CEO Curtis Campbell highlighted the company's focus on clients with complex financial needs, stating, "Research tells us that clients with more complex financial lives value assistance, expertise, and trusted advice. This is exactly where H&R Block stands apart."

A key driver of the stock's surge was H&R Block's aggressive share repurchase program. In fiscal 2026, the company bought back nearly 8% of its outstanding shares at an average price of $47.48 per share. Since 2016, H&R Block has repurchased a whopping 48% of its shares, significantly boosting per-share metrics.

Thanks to these buybacks, adjusted earnings per share from continuing operations jumped 13.9% to $5.31, outpacing net income growth. The company also raised its quarterly dividend by 10% to $0.46 per share, marking its ninth consecutive annual increase. H&R Block has paid a dividend every quarter since becoming public in 1962.

Looking ahead, management guided for fiscal 2027 revenue of more than $4.1 billion and adjusted EPS of $6.04 to $6.24, signaling continued confidence in the business.

H&R Block's latest moves underscore its transformation into a reliable cash generator. The combination of steady revenue growth, expanding margins, and disciplined capital allocation is a recipe for long-term shareholder value. For investors, the key takeaway is the company's ability to return significant capital through buybacks and dividends.

The 10% dividend increase is particularly notable, as it marks the ninth straight year of hikes. This consistency, coupled with a payout history dating back to 1962, makes H&R Block a compelling choice for income-focused investors. The stock now yields around 3.5%, which is attractive in a low-rate environment.

Moreover, the aggressive buyback program reduces the share count, boosting EPS even when net income grows modestly. This strategy can support the stock price over time, as seen in the recent jump. With fiscal 2027 guidance pointing to EPS growth of 14-18%, H&R Block appears well-positioned to continue rewarding shareholders.

However, the company faces competition from DIY tax software like TurboTax, and its growth is tied to the tax season's cyclicality. Still, its focus on complex tax situations and small business services provides a moat. For investors, H&R Block offers a blend of income and modest growth, making it a solid addition to a diversified portfolio.