Critical Contrast: Emerald (NYSE:EEX) and H&R Block (NYSE:HRB)

Emerald (NYSE:EEX) and H&R Block (NYSE:HRB) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Profitability

This table compares Emerald and H&R Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emerald	1.57%	1.75%	0.63%
H&R Block	15.20%	-179.57%	20.56%

Valuation and Earnings

This table compares Emerald and H&R Block”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emerald	$398.80 million	2.60	$2.20 million	$0.03	173.67
H&R Block	$3.61 billion	2.05	$595.32 million	$4.08	13.56

H&R Block has higher revenue and earnings than Emerald. H&R Block is trading at a lower price-to-earnings ratio than Emerald, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

14.9% of Emerald shares are held by institutional investors. Comparatively, 90.1% of H&R Block shares are held by institutional investors. 4.0% of Emerald shares are held by insiders. Comparatively, 1.3% of H&R Block shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Emerald has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, H&R Block has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.

Dividends

Emerald pays an annual dividend of $0.06 per share and has a dividend yield of 1.2%. H&R Block pays an annual dividend of $1.50 per share and has a dividend yield of 2.7%. Emerald pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. H&R Block pays out 36.8% of its earnings in the form of a dividend. H&R Block has raised its dividend for 9 consecutive years. H&R Block is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Emerald and H&R Block, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emerald	0	0	2	0	3.00
H&R Block	1	1	1	0	2.00

Emerald currently has a consensus target price of $7.90, suggesting a potential upside of 51.63%. H&R Block has a consensus target price of $62.00, suggesting a potential upside of 12.10%. Given Emerald’s stronger consensus rating and higher possible upside, analysts clearly believe Emerald is more favorable than H&R Block.

Summary

H&R Block beats Emerald on 9 of the 17 factors compared between the two stocks.

About Emerald

Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company provides B2B trade show franchises; and B2B print publications and digital media products, which provide industry specific business news and information across various sectors. It also offers B2B e-commerce and digital merchandising solutions to manufacturers and retailers through Elastic Suite and Bulletin platforms. The company serves retail, design, technology, equipment, and safety and security. Emerald Holding, Inc. was incorporated in 2013 and is headquartered in New York, New York.

About H&R Block

H&R Block, Inc. engages in the provision of tax return preparation solutions, financial products and small business solutions. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955, and is headquartered in Kansas City, MO.