Key Takeaways:
- Intuit offers a modest forward dividend yield of 0.7%, but dividends and earnings are projected to grow at double-digit annual rates through 2028.
- Intuit has averaged 34% annual returns on capital, which makes it a capital compounder.
- Analysts think the stock is fairly valued, but it still could be a great buy-and-hold stock for dividend growth investors.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
Intuit is widely known for its growth in fintech, but it’s also evolved into a reliable dividend growth stock over the past decade.
With strong brands like TurboTax, QuickBooks, Credit Karma, and Mailchimp, plus consistent earnings and cash flow growth, Intuit is positioning itself as a solid long-term compounder that could be a good buy-and-hold dividend growth stock for the next decade.
Why Is Intuit’s Stock Only Up ~5% in the Past Year?
Intuit’s share price has been pretty flat over the past year. Here’s what’s affecting Intuit stock the most today:
- Competitive Pressures from Free Tax-Filing Alternatives: Increased competition from free tax-filing options like the IRS Direct File program has raised concerns about TurboTax’s future market share.
- Conservative Forward Guidance: Intuit’s cautious guidance for revenue and earnings growth in 2025 has led investors to temper their expectations, even after strong recent results.
- Valuation Concerns Amid Market Expectations: With a forward P/E of about 32x today, the stock is already pretty reasonably priced, making it vulnerable to pullbacks if performance doesn’t clearly exceed expectations.
Still, analysts expect Intuit to be a long-term compounder as both earnings and dividends are expected to continue growing in the double digits over the next few years.
Analysts Think the Stock Has About 5% Upside Today
Wall Street analysts currently have an average price target of $697/share for Intuit, which implies that the stock has about 5% upside since it’s trading around $662/share today.
While that might seem like low upside, it’s worth noting that Intuit is a highly profitable, cash-generating tech company with consistent dividend and earnings growth. The business has averaged 34% returns on capital over the past 10 years, so it’s likely that Intuit will continue to be a long-term capital compounder.
See why Intuit could be undervalued today with TIKR (It’s free) >>>
1: Dividend Yield
Intuit currently offers a forward dividend yield of 0.7%, just above its 5-year average of about 0.65%.
While that might not seem impressive at first glance, this is near the highest dividend yield Intuit has offered in the past five years, which suggests the stock could be attractively priced today.
Intuit has consistently raised its dividends every year for over a decade. While it is still a growth-first software company, its reliable dividend growth, supported by strong cash flow and earnings, is a key plus for long-term investors.
Find buy-and-hold dividend stocks that are even better than Intuit today with TIKR. (It’s free) >>>
2: Dividend Safety
For Intuit’s fiscal year 2025 ending in July 2025, the company is projected to have a dividend payout ratio of just 21.4%, based on expected full-year normalized EPS of $19.35 with $4.14 in dividends per share.
A 21% payout ratio is way below the 70% mark that’s usually seen as healthy, which means Intuit has plenty of room to keep investing in R&D, make acquisitions, and still grow its dividend over time.
Analysts expect EPS and dividends to continue steadily rising at double-digit rates through 2028. With strong free cash flow and consistent earnings growth, Intuit’s dividend looks well-covered and safe.
See Intuit’s full growth forecast and analyst estimates. (It’s free) >>>
3: Dividend Growth Potential
Over the past five years, Intuit has consistently grown its dividends a bit slower than annual earnings growth.
Over the next three years, EPS is projected to grow at a 12% compound annual growth rate, while dividends per share are expected to grow slightly slower at an 11% CAGR.
That’s a strong pace for a dividend growth stock, leaving plenty of room for the dividend to grow meaningfully in the decades ahead.
TIKR Takeaway
Intuit isn’t a high-yield stock, but with strong brands, a history of smart acquisitions, and a low payout ratio, Intuit has room to keep rewarding shareholders for years to come.
Even though analysts think the stock is just about fully valued today, it could be an excellent dividend growth stock to buy and hold.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks and was built for investors who think of buying stocks as buying a piece of a business.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
