Get All Your Financial Solutions From One Company

Fiscal 2011 was such a great year for Intuit (Nasdaq: INTU  ) that the company has decided to pay a dividend for the first time in its history. The first dividend will be $0.15 a share, with a yield of 1.33%, and it'll be paid on Oct. 18.

Three sectors helped the company this year and stand poised to continue to in the future.

Small-business accounting leader
Intuit has many business segments, but is probably best known for its small-business accounting software QuickBooks. Growth in QuickBooks Online and Enterprise Solution drove the revenue growth, but all versions of QuickBooks continue to sell well, with revenue growing 11% for the year. In the realm of small-business accounting solutions, QuickBooks is the leading software, beating out competing offerings such as Sage Group's Peachtree Accounting, Microsoft's (Nasdaq: MSFT  ) Small Business Manager and NetSuite's (NYSE: N  ) Small Business.

QuickBooks integrates well with other Intuit offerings, especially for small businesses that have employees. Payroll customers grew by 2% last year despite the tough economy. Although payroll-management levels have not quite reached the levels of Paychex (Nasdaq: PAYX  ) and Automatic Data Processing (Nasdaq: ADP  ) , it is an added benefit to QuickBooks customers to have a payroll solution that works specifically with the software used to track business financials.

Furthermore, more merchants are using Intuit Payment Solutions, growing the number of merchants by 11% for the year. Small businesses are moving away from other services, including eBay (Nasdaq: EBAY  ) service PayPal, and integrating Intuit payment processing on websites, at retail terminals, through QuickBooks, and even by using smartphones with special card readers.

Do your own taxes
There's more to Intuit than QuickBooks. Revenue growth of consumer-tax software TurboTax grew 13% for the year on unit growth of 12%, meaning that the revenue increase was not simply due to higher prices. With an estimated 19 million people filing their own taxes this year, TurboTax was poised to be a beneficiary. H&R Block (NYSE: HRB  ) tried to expand its personal-tax business by acquiring TaxACT, a move that the Justice Department ultimately blocked in May, citing antitrust concerns. The attempted purchase, however, shows how desperate Block was to compete with Intuit in this lucrative and growing sector.

See where your money went
Lastly, Intuit has emerged as the premier provider in personal-finance management software with Quicken. Quicken emerged victorious in 2009 after a long head-to-head battle with Microsoft Money to win this lucrative market. Throw in its acquisition on Mint.com the same year, and Intuit has provided the tools to track personal finances.

Of course they do
The management team at Intuit expects growth in all aspects of its business next year. Add to the potential of more dividends in the future, and it becomes an interesting company to keep an eye on. As it continues to expand its business offerings, it may be better positioned to compete with the other companies I've mentioned. I'll be following this company closely, and I urge you to do the same by adding it to your watchist.

Fool contributor Robert Eberhard uses Quicken and QuickBooks but owns no stock in any companies mentioned here. Follow him on Twitter, where he goes by @GuruEbby. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Automatic Data Processing, Microsoft, eBay, and Paychex and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 06, 2011, at 4:32 PM, elGordo wrote:

    It is certainly true Intuit has done an excellent job for it's stockholders and in most cases for it's clients as well.

    There is one area, however, where Intuit has stubbed it's toe and doesn't seem to be doing much about it. Historically, Intuit has concentrated on creating software for Windows users and has treated Mac owners as unwanted stepchildren. In the late 90's Apple had to actually PAY Intuit to continue to update Quicken for Mac. Also, Quickbooks for Mac was not made available until the middle of the last decade and the last Quicken for Mac update that can track investment transactions was 2007.

    Intuit has updated Quicken for Mac at least 5 times in the 10 years since Apple moved to OS-X but (except for Quicken Essentials) it did so using the old OS architecture since Apple kindly included a program that would run older software . But Quicken Essentials doesn't track investments. The last version of Quicken for Mac to do so was 2007 written on the old OS architecture. While Mint.com is an excellent online service and offers an alternative to Quicken, it doesn't provide historical tracking of investment buys and sells either.

    Apple has now upgraded OS-X once again and after 10 years decided to drop the program allowing use of old (and outdated) software. So Mac owners who need investment tracking can: a) not upgrade to the latest OS-X in order to still use Quicken 2007, b) spend a pile of money getting Quicken for Windows, Windows OS and Parallels (or similar program) in order to get the benefits of the OS-X upgrade, or c) find another accounting program to do the job.

    Also over the last 10 years, Macs have grown in popularity, especially the laptops. Mac users have become a significant portion of computer users, yet Intuit has ignored them for the most part. Intuit has missed and will continue to miss the fastest growing segment of the computer market if it continues to ignore Mac users as it has in the past.

    Doesn't sound like a great business decision to me.

    elGordo (the Fat Fool)

  • Report this Comment On October 07, 2011, at 2:56 PM, XMFTheGuruEbby wrote:

    elGordo,

    You present an interesting point that I failed to truly consider.

    While I do agree that the use of Macs has been increasing, and INTU has neglected the market, the truth is that PC still dominates the market. The general consensus that I get from a quick Google search is that the Windows platform is still an 80/20 split for the most part. Who knows where Apple will go in the future, but it does make sense to focus on PC. I've included some links at the bottom.

    No updates since 2007 is kind of ridiculous though.

    Thanks for reading!

    TMFGuruEbby

    http://en.wikipedia.org/wiki/File:Operating_system_usage_sha...

    http://blog.hunch.com/?p=45344

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