Profiting From The Tax Industry

Includes: HRB, INTU, JHTXQ
by: Stockerblog

Now that you have finished filing your tax returns (or at least filed your extensions), you can now concentrate on the companies that make money off taxes. These include the tax preparers and the tax software.

The larger of the two tax preparation companies, H&R Block (NYSE:HRB), is based in Kansas City, Missouri and has been around since 1946. It also provides investment, mortgage and accounting services. Its P/E is 27 and the PEG is 1.43. It pays a decent yield of 2.2%. 91% of its shares are owned by institutions, the largest of which includes Franklin Resources, which owns 9.25%, and T. Rowe Price which owns about 8% of the shares. It reports its earnings on June 6.

Jackson Hewitt Tax Service (JTX) has been appearing in the news quite a bit lately. The Justice Department is accusing some of the company's franchisees of tax fraud. This is the fourth time in the last year that the government has gone after it. Of course, with all the bad news, the stock took a substantial dive at the end of March. It has a P/E of 17.3 and a PEG of .84, with a yield of 1.7%. 98% of its shares are owned by institutions, including Vanguard, Delaware Management and Wellington.

The other way to play the 'tax industry' is through Intuit (NASDAQ:INTU), which markets the extremely popular TurboTax software, along with LaCerte and ProSeries tax programs. It also sells the best selling QuickBooks accounting software. Its P/E is 28.7 and the PEG is 1.4. 85% of the shares are owned by institutions, of which Barclays and Fidelity have the largest ownership.

Lots of last minute filings caused Intuit's server to crash, but the problem didn't affect the stock price, which was up a nickel yesterday.

Disclosure: Author does not own any of the above.

HRB vs JTX vs INTU 1-yr chart

HRB vs JTX vs INTU 1-yr chart