The case for Intuit Inc. (NASDAQ:INTU)
Intuit is the company behind some of the most-used niche software in the nation. Its TurboTax tax-preparation software leads the industry in helping taxpayers get their returns prepared and filed every year, and its Quickbooks accounting software is a staple among small businesses that rely on simple software solutions to help manage their business finances.
But beyond that, Intuit Inc. (NASDAQ:INTU) has sought to become a more integral part of improving the state of personal finances across the country. Its Quicken software helps households manage their budgets and create sustainable spending plans, integrating bank and investment accounts into a one-stop hub for easy analysis and tracking. Moreover, back in 2009, Intuit added the web-based personal finance company Mint.com to its portfolio, giving it exposure to a whole new generation of potential customers and setting the stage for massive growth as that younger generation ages and matures.
How Intuit Inc. (NASDAQ:INTU) treats its stakeholders
Intuit does a good job of balancing the needs of its workers, investors, and customers, along with furthering its broader mission of serving the community. Given that part of Intuit’s business is to serve businesses trying to treat their employees well, Intuit has to stand as a role model, and its operating values show its commitment to the people who work for it. The company offers matching donations for its workers’ contributions to nonprofits, and it also goes beyond standard benefits by offering paid time off for approved employee volunteer efforts, many of which focus on educational programs for disadvantaged youth and efforts to fight poverty by improving access to social services. With a 79% favorable rating from Glassdoor, the company inspires substantial loyalty from its workforce.
For its customers, Intuit’s products have become so popular that they practically sell themselves. The company’s tax preparation and accounting software have a mildly steep learning curve, but once you go to the trouble of getting yourself set up on them, the incentive to stick with Intuit Inc. (NASDAQ:INTU) products is extremely high, encouraging repeat business. Moreover, as the leading products in their respective fields, it’s easier for customers to find help on Intuit products than on more obscure competing platforms.
Intuit investors have ridden the wave of profits higher, both in recent years and over the long run. In the past five years, the company has averaged 16% annual total returns for shareholders, and with net profit margins of nearly 20% and return on equity topping 30%, Intuit has seen its dominance in its niche industry grow. Given its attention to small businesses, Intuit is also setting the stage to challenge the larger-company-focused Automatic Data Processing (NASDAQ:ADP) and Paychex, Inc (NASDAQ:PAYX) , with potential to get a bigger chunk of payroll processing and health-care benefits markets as well.
