What happened
Intuit (INTU 3.01%) shareholders outperformed a rising market last month. Their stock gained 12% in June compared to a 2.2% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally added to significant gains for the tax-prep software specialist, which is up over 20% so far in 2021 and has risen over 65% in the past full year.
Image source: Getty Images.
So what
June's rally wasn't tied to any specific news out of the company, but rather involved more investor enthusiasm following the company's late May earnings report. It likely also helped that last month was a particularly good one for the tech sector, with the Nasdaq index soaring 5%.
Yet investors continue to find reasons to like Intuit's latest operating trends. Sales jumped 39% through April, the company announced in late May. This year's tax filing season, which runs through July, should deliver big gains in the company's core TurboTax software.
Now what
TurboTax's growth potential is limited due to its dominance of online tax prep. But Intuit is showing encouraging progress at selling complementary services like its recent "premier" brand that is aimed at investors. The recent acquisition of Credit Karma, meanwhile, has shareholders excited about new revenue streams in the software services niche.
Yet one of the biggest attractions of Intuit's stock today is the high cash balances the company maintains. As of late May, management had over $4 billion on the books thanks in part to gushing operating cash flow through the early part of this year's tax season.
Those resources helped convince executives to boost Intuit's dividend by 11% for the next payout, which will hit investors' accounts on July 19. Considering that extra income and expectations for nearly 30% sales growth in the current fiscal quarter, it's no surprise that investors pushed shares higher last month.
