More Than Just TurboTax: Intuit (INTU)

Intuit is well managed in several respects. First, return on invested capital is 24%, which is well above average. Second, it is also in excellent financial condition. Cash exceeds outstanding debt, and Intuit generates considerably more cash from its business operations than is needed for normal business purposes. This free cash flow has been growing at a 17% annual rate over the past three years. The surplus cash can be used for shareholder dividends, share repurchases, or acquisitions of other products or companies to take advantage of new market opportunities. Third, its earnings growth record is attractive. Over the past three and five years, earnings per share have increased by 15% annually, and over the next several years  growth is estimated at 13%, almost twice the U.S. corporate average.

Though Intuit is nearly thirty years old, this Mountain View, California, company continues to be innovative in keeping up with changes in technology and in how people work and live. We have a near-term target of $80 for the stock, which we expect to rise over time along with its earnings.

Sustainability Profile

Intuit offers products that are intended to solve problems for individuals and small businesses. Its corporate sustainability policies include matching employee donations and fostering employee volunteer activities for at-risk children and disadvantaged adults. The company also offers selected products to nonprofits to support financial literacy or small business development in disadvantaged communities. Intuit’s sustainability reporting got off to an impressive start in 2011 with detailed disclosure on key subjects such as waste reduction and the company’s comprehensive approach to reducing its greenhouse gas emissions. The company also participates in the Carbon Disclosure Project. But the company owes stakeholders an update, especially on its goal to reduce greenhouse gas emissions 15% from 2007 levels by 2012. Intuit’s Supplier Responsibility Guidelines require suppliers to consider their impacts on the environment and in the communities they serve.

Intuit has been consistently recognized in surveys as one of the best places to work.


Revenues: $4.5 billion

Earnings Per Share (EPS):
2014E   $3.57
2015E   $4.00

Projected 3-5 Year Annual Earnings Growth:  13%
Dividend Yield:  1.0%
52-week Low-High:  $55.54 – $77.78

Risk:  Moderate