Why Intuit’s stock is up 850%

Tax season isn’t that far away and more of us than ever before will be filing our annual return online.

We’re going online because of a combination of increasing comfort with the Internet and tax software that makes it ever easier. It also helps that you get a refund deposited into your account in just a few days.

The change in our filing habits has been as dramatic as the popularity of Do-it-Yourself programs like TurboTax.

Turbo Tax is a product sold by Intuit, (NDQ: INTU) a company that develops and sells financial, tax  and accounting software to individuals, small businesses and accountants.  The company is headquartered in Mountain View, Ca., and more than 95% of its revenues and earnings come from sales in the U.S. That means it has been more or less immune to the ongoing trade war between China and the U.S.

A recent CNBC article  noted that Intuit’s shares are up about 36% this year, an impressive run for any company at a time of economic and political uncertainty.

Even more remarkably,  Intuit’s stock is up over 850% in the past decade, versus a 190% increase in the S&P 500 index.  It has gained an average of 25% every year of the last 10, according to Jefferies Group, the financial advisory firm.

Revenues grew 13% to $6.8 billion in 2019.  In its latest quarter reported at the end of August Intuit showed continued growth, led by its QuickBooks small business software.  Looking ahead Intuit projected 2020 revenue will be between $7.44 billion to $7.54 billion, up 10% to 11%.

It has increased its dividend in each of the last 5 years with the most increase with the August payment.  The $0.53 quarterly payment yields 0.81% a current prices.

Intuit’s success  is an example of a company with  brand power.  It has dominant product with strong protective moats. The consistency, reliability and familiarity of the products, encourages loyalty and repeat use.  Its marketing message creates value by ensuring consumers can find the brand, recognize it and be assured that when they purchase it, it delivers the same quality each time.

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