As one of life’s two certainties, tax season can be the most, well … taxing.
These days, far too many of us unwilling to do our own taxes, so we leave it up to trusted tax professionals. That way we don’t make mistakes with filing status, dependents, capital gains, or making dangerous assumptions.
Many of us also forget human error can be costly. Even the smallest error can lead to expensive tax bills and a possible visit from the “friendly” IRS.
As we near Tax Day, here are some of the top stocks that historically run this time of year.
Tax Stock No. 1 – H&R Block
Understandably, shares of H&R Block (NYSE:HRB) tend to rise every tax season.
In April 2017 for example, the stock exploded from a low of $20.22 to a high of $28.42. In April 2018, the stock would run from $22.31 to a high of $27.13. Last year H&R Block moved from a low of $22.87 to a high of $28.03. All thanks to tax season. For 2020, I expect to see a similar $5 to $6 move in the stock, even with coronavirus-induced pullbacks.
Granted, recent earnings weren’t anything to write home about, but it’s tough to ignore a stock that tends to run higher every April. In recent weeks, H&R Block said revenue rose 11% year over year to $519 million, topping expectations for $485.6 million thanks in part to tax prep.
However, losses were greater than expected. Its adjusted loss per share was 59 cents, as compared to a year earlier loss of 52 cents. Estimates were calling for a loss of 55 cents. Still, even with the loss, the company did say it does expect to hit its full-year EBITDA margin target of 24% to 26%, as highlighted by Motley Fool contributor Joe Tenebruso.
Tax Stock No. 2 – Intuit
Shares of Intuit (NASDAQ:INTU) have done nothing but move higher in the last five years. Since 2015, the stock skyrocketed from a low of $79 to a high of $304.44. The only reason it’s down at the moment is because the coronavirus is wreaking havoc.
However, once the fear has subsided, Intuit is a steal at current prices.
Wells Fargo analyst Michael Turrin seems to agree, upgrading the stock from “equal-weight” to “overweight” with a new price target of $320. Despite uncertainty in the markets, this stock is “among the most well-positioned in our coverage” to weather the storm thanks in part to the certainty of taxes.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.