H&R Block: Solidifying Market Dominance, Great Momentum, Healthy Dividend Yield

H&R Block (HRB) is by far the largest provider of tax preparation and other financial and business services in the United States. The company's biggest and oldest business is Tax Services, which generates 77% of revenues and over 90% of operating profits. Block has 12,000 offices across the country, of which about 1/3rd are run by franchisees. These offices processed over 23 million tax returns in 2010, 15.5% of all returns filed. To put Block's dominance in perspective, second place Jackson-Hewitt (JTX) processed about 2.5 million - about 1/10th of HRB.Although Block's bread-and-butter is office prepared returns, the company has aggressively moved into the "do-it-yourself" software-based return preparation market in the past year. While H&R produces its own software product, it made a big move last October with its purchase of TaxACT, which doubled DIY sales. This now puts Block solidly at #2 in tax software, but still only... Read more