Last Update 3/10/25
Intuit Inc. (NASDAQ: INTU) is a well-known player in the financial software industry, powering small businesses, tax filers, and individuals through its popular products like QuickBooks, TurboTax, and Credit Karma. With a strong reputation and a steady stream of recurring revenue, the company has positioned itself as a leader in financial technology.
While it’s not typically the first name that comes to mind for dividend investors, Intuit does offer a growing payout, backed by a solid financial foundation. The company has the cash flow and earnings power to support steady dividend increases, but with a relatively low yield, it may not be a core holding for income-focused investors. The bigger question is whether its dividend growth and overall financial strength make up for the lack of immediate yield.
Key Dividend Metrics
📌 Dividend Yield: 0.68%
📌 Annual Dividend: $4.16 per share
📌 Payout Ratio: 36.3%
📌 5-Year Average Yield: 0.60%
📌 Dividend Growth Rate (5-Year Avg.): Consistently increasing
📌 Next Dividend Date: April 18, 2025 (Ex-Dividend: April 10, 2025)
Dividend Overview
Intuit started paying dividends in 2012 and has steadily increased its payouts since then. While its dividend yield remains below 1%, the company has been rewarding long-term shareholders with consistent hikes.
A yield under 1% won’t attract those who rely on dividends for steady income, but for investors focused on growth, the appeal lies in its ability to compound over time. The current yield of 0.68% is slightly above its historical average, but it remains a relatively modest payout compared to traditional income stocks.
The good news is that the company’s payout ratio sits at 36.3%, which means it has plenty of room to continue increasing dividends without putting strain on its financials. Intuit’s dividend policy leans more toward rewarding patient investors who prioritize capital appreciation rather than those looking for a significant passive income stream.
Dividend Growth and Safety
One of the biggest strengths of Intuit’s dividend policy is its commitment to growth. The company has raised its payout consistently, reflecting confidence in its ability to generate strong earnings.
The dividend is well-covered by both earnings and cash flow. Intuit produces $5.8 billion in operating cash flow and $4.62 billion in free cash flow, ensuring that its dividend is easily manageable. Unlike companies that stretch their payouts too thin, Intuit maintains a conservative approach, allowing it to reinvest in growth while still returning value to shareholders.
For investors who favor dividend reinvestment strategies, this stock presents an opportunity for compounding. While the yield is low, its strong history of dividend increases means it could become a meaningful contributor to total return over time.
Chart Analysis
Recent Price Action
Intuit’s stock (INTU) recently showed a bounce off its recent lows, closing at 609.61 after hitting an intraday low of 594.53. The stock opened at 605.86 and reached a high of 614.63, indicating some intraday volatility. The overall trend over the past few months suggests a period of weakness, with a notable decline from its highs near 700 late last year.
Moving Averages and Trend
The 50-day moving average (light blue line) has been trending downward and recently crossed below the 200-day moving average (dark blue line). This is often seen as a bearish signal, known as a death cross, which can indicate continued downside pressure. However, the stock is currently attempting to reclaim its 50-day moving average, a move that could determine whether this bounce has legs or is just a short-term relief rally.
Volume Analysis
Volume for the day was 1.69 million, which is in line with recent trading activity. There was a notable spike in volume at the recent bottom, suggesting that buyers stepped in aggressively as the stock dipped below $580. This type of action can sometimes indicate a potential reversal, but follow-through is needed. If volume remains strong on up days, it would suggest real buying interest rather than a temporary rebound.
Relative Strength Index (RSI)
The RSI, a momentum indicator, has been deep in oversold territory for some time, with a recent push higher. This suggests that the stock was due for a bounce after becoming overly extended to the downside. If the RSI continues rising but fails to break past the mid-range, it could signal that the relief rally lacks strength.
Key Support and Resistance Levels
The $580 level acted as a support zone where the stock found buyers. On the upside, the $625-$630 area appears to be an initial resistance point, aligning with the declining 50-day moving average. If the stock can push through this level with strong volume, it would suggest that buyers are regaining control. If it stalls here, another retest of recent lows may be in play.
Market Sentiment and Overall Structure
The broader pattern suggests that INTU is still in a downtrend, with lower highs and lower lows forming since its peak. The bounce off recent lows is encouraging, but without a break above key resistance levels, it remains a bear market rally rather than a confirmed reversal. The next few trading sessions will be critical in determining whether the stock can reclaim lost ground or if sellers step in at higher levels.
Analyst Ratings
📈 Upgrades
🟢 On March 5, 2025, JP Morgan analyst Mark Murphy upgraded Intuit from Neutral to Overweight, raising the price target from $640 to $660. Murphy pointed to Intuit’s stable business trends and ongoing innovation, suggesting that the company’s underperformance in recent years was more due to a valuation reset rather than fundamental weakness. He emphasized Intuit’s strength as a cloud-based financial platform that serves a broad range of customers, including individuals, self-employed professionals, small businesses, and mid-sized enterprises.
While acknowledging some risks related to macroeconomic volatility and potential policy changes, Murphy expressed confidence in Intuit’s ability to maintain strong pricing power and customer retention, making it a solid player in the fintech space.
📉 Downgrades
🔴 On August 14, 2024, Morgan Stanley analyst Keith Weiss downgraded Intuit from Overweight to Equal-Weight, trimming the price target from $750 to $685. Weiss raised concerns about Intuit’s rich valuation and questioned whether the company could sustain its high growth trajectory in the coming years.
Although he acknowledged Intuit’s solid financials and strong execution, he warned that the stock’s premium valuation may cap near-term upside potential. Weiss suggested that investors wait for a more favorable entry point, particularly if market conditions become less supportive of high-multiple growth stocks.
📊 Consensus Price Target
⭐ Current consensus among analysts: Buy rating
💰 Average price target: $705.62
🚀 Highest price target: $860.00
⚠️ Lowest price target: $530.00
The average price target suggests a potential upside of around 15.75% from current levels. Analysts remain generally optimistic about Intuit’s long-term prospects, though opinions are split on whether the current valuation leaves enough room for immediate gains.
This mix of upgrades and downgrades highlights the ongoing debate around Intuit’s growth trajectory versus its valuation premium, making it a stock that investors may want to evaluate based on risk tolerance and time horizon.
Earnings Report Summary
Intuit’s latest earnings report showed a solid quarter, with the company delivering results that outpaced expectations. Earnings per share came in at $3.32, beating analyst estimates of $2.57, which is a strong 26% increase compared to last year. Revenue was also impressive, reaching $3.96 billion, well ahead of the $3.83 billion analysts had projected. That marks 17% year-over-year growth, showing that demand for Intuit’s financial products remains strong.
While the numbers looked good, the company’s guidance for the next quarter was a bit more mixed. Intuit expects sales to land somewhere between $7.55 billion and $7.6 billion, which is slightly better than the $7.52 billion analysts were expecting. However, on the earnings side, the company forecasted adjusted EPS of $10.89 to $10.95, which fell short of the consensus estimate of $11.51. That softer outlook might have tempered some of the enthusiasm, but it’s clear Intuit is still in growth mode.
CEO Sasan Goodarzi emphasized that the company continues to push forward with innovations, particularly in artificial intelligence and financial automation. Intuit has been integrating AI-driven features across its platforms to improve services for both consumers and small businesses. These advancements are meant to keep the company at the forefront of fintech, making personal and business finance management easier and more intuitive.
The market reacted positively to the earnings report, with Intuit’s stock climbing after the announcement. Investors seemed to appreciate the strong financial performance, even with the slightly cautious guidance for the upcoming quarter.
All in all, Intuit delivered a strong quarter, with solid revenue growth and earnings momentum. While there may be some concerns about forward guidance, the company’s continued investment in AI and financial technology suggests it’s still on a promising trajectory. As long as it can keep innovating and expanding its customer base, Intuit looks like it has room to grow despite near-term uncertainties.
Financial Health and Stability
Intuit operates with a high level of profitability, which provides stability to both its business and its dividend policy. The company’s net income margin of 17.69% and operating margin of 15.7% confirm its ability to generate consistent earnings from its revenue streams.
Revenue growth has been particularly strong, rising 41% year-over-year. This kind of growth is rare for a company of Intuit’s size, proving that demand for its financial tools remains robust.
When it comes to cash flow, the numbers are just as solid. With $5.8 billion in operating cash flow and $4.62 billion in free cash flow, the company has the flexibility to fund its dividend, pursue acquisitions, and invest in innovation.
Liquidity remains in check as well, with a current ratio of 1.27. While this isn’t the most conservative number, it suggests that the company can comfortably meet its short-term obligations.
Valuation and Stock Performance
Current Price: $579.78
52-Week Range: $553.24 – $714.78
Trailing P/E Ratio: 57.03
Forward P/E Ratio: 32.79
PEG Ratio (5-Year Expected): 2.14
At a trailing price-to-earnings ratio of over 57, Intuit is not what most investors would call cheap. Even looking ahead, its forward P/E of 32.79 suggests that a good amount of future growth is already priced into the stock.
The PEG ratio of 2.14, which factors in earnings growth, signals that while the company is expected to expand, its valuation remains on the expensive side.
Looking at recent price action, Intuit is currently trading about 6% below its 52-week high. However, it’s also well above its 52-week low, showing that it has been relatively resilient despite broader market fluctuations.
From a technical perspective, the stock is sitting below both its 50-day moving average ($604.72) and its 200-day moving average ($626.05), which could suggest some near-term weakness. For investors with a long-term horizon, though, the more important question is whether Intuit can continue its growth trajectory and justify its premium valuation.
Risks and Considerations
One of the biggest risks with Intuit is its high valuation. When a stock trades at elevated multiples, any slowdown in earnings growth or a broader market selloff could lead to sharp declines.
For dividend investors, the low yield is another factor to consider. There are plenty of companies offering higher payouts with stable growth, so investors need to determine if Intuit’s combination of dividend growth and capital appreciation fits their strategy.
Macroeconomic factors could also play a role in the stock’s performance. While Intuit’s products are widely used, a slowdown in small business activity or personal tax filing could impact revenue growth. Additionally, competition in the financial technology space is increasing, with more cloud-based software providers entering the market.
Final Thoughts
Intuit is not a traditional income stock, but it does have a lot to offer investors who are willing to take a long-term approach. Its dividend may be small, but it is growing consistently and backed by strong financials.
For those looking to build wealth over time, Intuit provides a combination of dividend growth and capital appreciation potential. The stock’s premium valuation may be a hurdle for new investors, but its track record of profitability and cash flow generation make it a compelling long-term play.
Investors who are comfortable with lower immediate income in exchange for future growth might find Intuit an attractive option. However, those who need higher current income may find better opportunities elsewhere.
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