H&R Block (NYSE:HRB) and OneSpaWorld (NASDAQ:OSW) Critical Survey

OneSpaWorld (NASDAQ:OSW) and H&R Block (NYSE:HRB) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for OneSpaWorld and H&R Block, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OneSpaWorld	0	1	5	0	2.83
H&R Block	1	3	1	0	2.00

OneSpaWorld currently has a consensus price target of $34.00, suggesting a potential upside of 8.66%. H&R Block has a consensus price target of $46.67, suggesting a potential downside of 15.69%. Given OneSpaWorld’s stronger consensus rating and higher probable upside, analysts clearly believe OneSpaWorld is more favorable than H&R Block.

Valuation & Earnings

This table compares OneSpaWorld and H&R Block”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OneSpaWorld	$961.00 million	3.30	$71.62 million	$0.84	37.25
H&R Block	$3.95 billion	1.72	$733.60 million	$5.72	9.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OneSpaWorld	8.26%	18.93%	14.90%
H&R Block	18.59%	-214.84%	22.56%

Volatility & Risk

OneSpaWorld has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, H&R Block has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Insider & Institutional Ownership

96.0% of OneSpaWorld shares are held by institutional investors. Comparatively, 90.1% of H&R Block shares are held by institutional investors. 3.6% of OneSpaWorld shares are held by company insiders. Comparatively, 0.7% of H&R Block shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

OneSpaWorld pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. H&R Block pays an annual dividend of $1.84 per share and has a dividend yield of 3.3%. OneSpaWorld pays out 23.8% of its earnings in the form of a dividend. H&R Block pays out 32.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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.

Summary

OneSpaWorld beats H&R Block on 10 of the 17 factors compared between the two stocks.

About OneSpaWorld

OneSpaWorld Holdings Limited operates health and wellness centers onboard cruise ships and at destination resorts worldwide. Its health and wellness centers offer services, such as traditional body, salon, and skin care services and products; self-service fitness facilities, specialized fitness classes, and personal fitness training; pain management, detoxifying programs, and body composition analyses; weight management programs and products; and medi-spa services. The company also provides its guests access to beauty and wellness brands, including ELEMIS, Grown Alchemist, Kérastase, Dysport, Restylane, Thermage, CoolSculpting, truSculpt 3D, truSculpt iD, Good Feet, and Hyperice with various brands offered in the cruise market. The company is based in Nassau, Bahamas.

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.