H&R Block Raises Dividend 9.5% to $0.46

H&R Block raised its quarterly dividend to $0.46 per share from $0.42, an increase of 9.5% that takes the annual dividend to $1.84. The new rate went ex-dividend on September 3, 2026. At a share price of $42.30, the forward yield is 4.33%.

Why the dividend changed

H&R Block presented the increase as part of a broader capital-allocation program supported by stronger operating results and cash generation. Fiscal 2026 revenue increased 4.9% to $3.95 billion, driven by higher pricing and company-owned volume in U.S. assisted tax preparation, international growth and increased Wave subscription revenue and payments volume. Operating cash flow rose 23%. Adjusted net income increased 6.9% to $688.0 million, while adjusted earnings per share increased 13.9% to $5.31, helped by higher earnings and fewer shares outstanding. H&R Block’s fiscal 2026 results provide the financial context for the board’s decision.

The company’s capital-allocation order also explains the dividend’s role. Management said its priorities remain investing in the business, growing the dividend and returning excess capital through share repurchases. Fiscal 2026 included $500.3 million of repurchases, and the company ended the year with approximately $600 million remaining under its authorization. Management described the company’s cash generation as significant and stable, giving it flexibility to fund all three priorities. The fiscal 2026 earnings-call materials contain that capital-return commentary.

The increase was not presented as the result of a split, merger, spin-off or other special situation. It followed an operating year in which assisted tax preparation, international operations and Wave all contributed to revenue growth.

Dividend track record

The increase extends H&R Block’s dividend-growth streak to 10 years. Its five-year record is 8.9% annual growth, while the last annual cut occurred in 1997. That combination shows a long period of rebuilding and sustained increases, although the record is not an uninterrupted history without reductions.

Annual payments rose from $1.04 in 2020 to $1.07 in 2021, $1.12 in 2022, $1.22 in 2023, $1.39 in 2024 and $1.59 in 2025. The annual growth rate accelerated from 2.9% in 2021 to 14.4% in 2025, including 13.9% growth in 2024. The quarterly sequence held at $0.42 from September 4, 2025 through June 3, 2026 before moving to $0.46 on September 3, 2026. H&R Block’s dividend history confirms the payment sequence.

Is the dividend covered?

The dividend consumes 30% of earnings. That payout ratio directs a minority of reported profit to shareholders and leaves an earnings buffer for operating volatility, reinvestment and other capital uses. It also makes the higher rate less dependent on maintaining the full benefit of any single year’s earnings increase.

SmarterDividends rates the dividend A, with a safety score of 91. That corresponds to very safe (score 80-100), meaning the present earnings coverage, operating profile and payment record indicate a low relative risk of a reduction. The grade does not eliminate risks from weaker tax-season volumes, pricing pressure or a deterioration in cash generation.

Fiscal 2026 earnings also require some context. Reported results included a one-time, non-cash tax benefit of $84.1 million, while adjusted earnings excluded that item. The dividend’s 30% payout ratio nevertheless indicates coverage without requiring all earnings to be distributed.

Yield and valuation

The 4.33% forward yield exceeds the Consumer Cyclical sector median forward yield of 2.66%. The comparison gives HRB a higher current income rate than the sector benchmark at the stated share price, while the annual dividend provides $184.00 of income per 100 shares.

The shares have recorded an 11.0% loss over one year. At $42.30, SmarterDividends estimates fair value at $63.24 and classifies the shares as undervalued, with 43% upside to fair value. That verdict is a valuation comparison rather than a forecast or a measure of dividend coverage.

What to watch

Fiscal 2027 guidance is the next test of the operating support behind the increase. H&R Block expects revenue of $4.11 billion to $4.16 billion, adjusted EBITDA of $1.11 billion to $1.14 billion and adjusted diluted earnings per share of $6.04 to $6.24. Investors can track assisted-tax pricing and volume, Wave growth, operating cash flow and spending on the company’s expert-led, technology-enabled strategy against those ranges. The results release sets out the guidance.

Management said it expected to report first-quarter results in November and provide a deeper strategy review at an Investor Day in December. Those updates can clarify investment requirements and capital-return priorities. The next dividend declaration will also establish the next ex-dividend and payment dates.