HRB

HRB is a boring, durable cash generator trading at a deep-value multiple. FY2025 delivered revenue of $3.76B (+4.2% YoY) and net income of $606M (+1.8%), with diluted EPS of $4.39 (+6.6%) — the EPS outpacing net income reflects the aggressive buyback program (shares outstanding down 4.0% YoY). At $36.33, the stock trades at just 8.3x earnings and 1.3x sales, while the MD&A confirms the core engine is still growing: U.S. assisted tax prep revenue rose 6.1% on a 5.1% net average charge increase plus 1.0% volume growth, and DIY revenue jumped 9.7% on a 9.8% paid net average charge increase. Wave (small-business SaaS) grew 13.2%. This is pricing power, not just volume — exactly what you want in a mature category.

The cash story is the heart of the call. Operating cash flow of $681M against an $82M capex line implies roughly $599M of free cash flow on a $4.87B market cap — a ~12% FCF yield. Management is returning it: $197M in dividends (+9.8%) plus material buybacks shrinking the share count. Long-term debt fell sharply from a year ago (-23.3% to $1.14B), the CLOC was undrawn at year-end, and the long-term debt is fixed-rate Senior Notes — so rate risk on the back book is muted. The 681% ROE is a quirk of a tiny $89M equity base after years of buybacks, not a real economic return, but it does show the company is returning capital faster than it earns retained earnings — a feature, not a bug, at this valuation.