Is Intuit One of the Best Companies in America?
Recently, the Motley Fool released its list of The 25 Best Companies in America. Paraphrasing Highlander,in the end, there could be only 25. But some promising companies almost made the final cut, and one of the companies that deserves at least an honorable mention for its achievements is Intuit .
The case for Intuit
Intuit is the company behind some of the most-used niche software in the nation. Its TurboTax tax-preparation software leads the industry in helping taxpayers get their returns prepared and filed every year, and its Quickbooks accounting software is a staple among small businesses that rely on simple software solutions to help manage their business finances.
But beyond that, Intuit has sought to become a more integral part of improving the state of personal finances across the country. Its Quicken software helps households manage their budgets and create sustainable spending plans, integrating bank and investment accounts into a one-stop hub for easy analysis and tracking. Moreover, back in 2009, Intuit added the web-based personal finance company Mint.com to its portfolio, giving it exposure to a whole new generation of potential customers and setting the stage for massive growth as that younger generation ages and matures.
How Intuit treats its stakeholders
Intuit does a good job of balancing the needs of its workers, investors, and customers, along with furthering its broader mission of serving the community. Given that part of Intuit's business is to serve businesses trying to treat their employees well, Intuit has to stand as a role model, and its operating values show its commitment to the people who work for it. The company offers matching donations for its workers' contributions to nonprofits, and it also goes beyond standard benefits by offering paid time off for approved employee volunteer efforts, many of which focus on educational programs for disadvantaged youth and efforts to fight poverty by improving access to social services. With a 79% favorable rating from Glassdoor, the company inspires substantial loyalty from its workforce.
For its customers, Intuit's products have become so popular that they practically sell themselves. The company's tax preparation and accounting software have a mildly steep learning curve, but once you go to the trouble of getting yourself set up on them, the incentive to stick with Intuit products is extremely high, encouraging repeat business. Moreover, as the leading products in their respective fields, it's easier for customers to find help on Intuit products than on more obscure competing platforms.
Intuit investors have ridden the wave of profits higher, both in recent years and over the long run. In the past five years, the company has averaged 16% annual total returns for shareholders, and with net profit margins of nearly 20% and return on equity topping 30%, Intuit has seen its dominance in its niche industry grow. Given its attention to small businesses, Intuit is also setting the stage to challenge the larger-company-focused Automatic Data Processing and Paychex , with potential to get a bigger chunk of payroll processing and health-care benefits markets as well.
Finally, Intuit understands the need to help its communities, frequently donating software to worthy nonprofit organizations in order to help them address important social problems. In particular, its innovative Financial Freedom Foundation focuses on programs benefiting small business and individuals, with its Intuit Tax Freedom Project being its first program, offering free tax preparation and filing on more than 11 million returns since the project began in 1998.
The case against Intuit
Intuit's products are far from simple. Customers rate them relatively low on ease of use and see them as being relatively expensive. Yet it's hard to see that view as a negative, given that it likely reflects more on customers' general unhappiness at having to deal with taxes and accounting than on Intuit's products in particular.
More importantly, any useful business and financial software package will have at least some complexity built in, or else it won't be able to get the job done. By finding the right balance between simplicity and offering a complete solution, Intuit does its best to meet everyone's needs.
There's no dishonor in missing the list
Intuit is a lot smaller than many software companies, but its products have revolutionized the ability for millions of people to manage their own finances. Even though Intuit didn't eventually make the Best 25 list, Intuit definitely deserved the distinction of being one of the 40 or so companies that were finalists in the selection process.
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The article Is Intuit One of the Best Companies in America? originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Automatic Data Processing, Intuit, and Paychex. The Motley Fool owns shares of Intuit. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.