E Intuit: High-Growth Dividend Stock

Income investors might dismiss stocks with low dividend yields. Indeed, a current yield below 1% looks fairly unimpressive, as such as low yield will not generate meaningful income for shareholders right now. However, some dividend stocks with low yields are excellent long-term dividend growth stocks.

For example, Intuit Inc. (INTU) is a large-cap stock with a relatively low dividend yield of 0.5%. While this compares negatively to the 1.4% average yield of the S&P 500, investors should not automatically dismiss Intuit stock. In fact, Intuit is a premier dividend growth stock. Its high rate of dividend increases will more than compensate investors for a low current yield. As a result, Intuit is a top dividend growth stock.

 

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Business Overview and Recent Events

Intuit is a cloud-based accounting and tax preparation software giant, headquartered in Mountain View, California. Its products provide financial management, compliance, and services for consumers, small businesses, self-employed workers, and accounting professionals worldwide. Its most popular platforms include QuickBooks, TurboTax, Mint, and TSheets. While consumers are likely familiar with the TurboTax service, Intuit also has a high-growth small business segment. QuickBooks is arguably the company’s most popular small business service, as it has different versions including Quickbooks Pro vs Premier.

Cumulatively they serve more than 52 million customers. The company records more than $8.8 billion in annual revenues. The company has done an excellent job continuing to grow, despite the economic challenges posed by the coronavirus pandemic over the past year. On February 23rd, 2021, Intuit reported its Q2-2021 financial results for the period ended January 31st, 2021.

The company continued performing well during the year, growing its “Small business and Self-employed” revenues by 11% and its online ecosystem revenues by 22%. However, due to IRS opening later this year, its consumer group sales declined by 74%, causing total revenues to decline by 7% to $1.58 billion. The IRS began accepting and processing returns starting February 12th, compared to January 27th, during last year. EPS was $0.68 versus $1.16 last year, reflecting squeezed margins as a result of the IRS revenue period mismatch.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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