What’s the Best Tax Preparer Stock? TAX, HRB & INTU

April 15th is tax day and tax preparer stocks like small cap JTH Holding Inc (NASDAQ: TAX), mid cap H & R Block Inc (NYSE: HRB) and large cap Intuit Inc (NASDAQ: INTU) help millions of Americans to figure out just how much they owe to "big brother." But which of these tax preparation stocks is the best investment for investors looking for a way to offset that tax bite? First, here is a quick overview of each tax preparer:

JTH Holding Inc. Founded in 1997 by CEO John T. Hewitt, JTH Holding is the parent company of Liberty Tax Service - the fastest-growing tax preparation franchise with more than 4,400 offices and online. In fact, John T. Hewitt rang the NASDAQ closing bell on tax day this year. In mid March, JTH Holding reported that revenues for the three months ended January 31 had increased 8.3% to $40.7 million while US customers served during the calendar year through February 28, 2014 increased 7.7% (or 1,250,000 total returns processed in offices and online) with returns processed in offices increasing 6.1% to 1,148,000 and the number of returns processed online increasing 29.1% to 102,000thanks in part due to the acquisition of certain assets of an online tax preparation provider. Systemwide revenue increased 13.3% from the same period in the prior year while net income for the third fiscal quarter was $4.1 million verses $1.7 million. Finally, it should be noted that JTH Holding has a trailing P/E of 22.28 and a forward P/E of 14.75. On Tuesday, small cap JTH Holding rose 1.98% to $27.29 (TAX has a 52 week trading range of $15.22 to $28.00 a share) for a market cap of $356.29 million plus the stock is up 10.3% since the start of the year, up 60.1% over the past year and up 97% over the past five years.

H & R Block Inc. Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H & R Block prepares 1 in every 7 US tax returns plus over 11,000 company-owned and franchise retail tax offices worldwide which means the company has a retail office within 5 miles of most Americans. On April 10, H & R Block announced that H&R Block Bank had entered into a definitive purchase and assumption agreement (subject to regulatory approvals) with BofI Federal Bank to sell certain assets and transfer certain liabilities to BofI – a decision prompted by new rules that will impose higher capital requirements on savings and loan holding companies. The CEO noted:

"This is an important step in ceasing to be regulated as a savings and loan holding company, which we believe is in the best strategic interests of our company and our shareholders."

In early March, H & R Block reported earnings and noted that the delayed opening of IRS's e-file system to January 31 resulted in revenue related to tax returns prepared but not yet filed totaling $277 million being shifted to the company's fiscal fourth quarter ending April 30. For that reason, revenues sank 58%, or $272 million, to $200 million while the adjusted net loss from continuing operations increased to $209 million due almost entirely to the timing shift in revenues. Otherwise, H & R Block has a trailing P/E of 33.97 and a forward P/E of 14.01 along with a forward dividend of $0.80 for a 2.90% dividend yield to help offset the cost of using a tax preparer. On Tuesday, mid cap H & R Block rose 0.43% to $28.16 (HRB has a 52 week trading range of $25.98 to $32.42 a share) for a market cap of $7.72 billion plus the stock is down 3.2% since the start of the year, down 1.5% over the past year and up 58.2% over the past five years.

Intuit Inc. Founded in 1983 and with flagship products like QuickBooks, TurboTax and Quicken, Intuit helps customers manage their personal finances, run small businesses and pay employees. The company has approximately 8,000 employees with major offices in the United States, Canada, the United Kingdom, India and other locations. Back in mid February, Intuit reported that second-quarter revenue declined 12% to $782 million, reflecting processing delays and changes in the company's tax offerings that will shift revenue into the third quarter, plus a net loss of $37 million verses net income of $71 million. Intuit also completed an accelerated share repurchase agreement to buy back $1.4 billion in shares in December 2013 (with approximately $2 billion remains on the current share repurchase authorization) plus the company raised its third-quarter earnings forecast thanks to strong demand for TurboTax in the US tax-filing season and said it aims to double the number of customers for its small business group unit - its biggest unit. It should be noted that the company gets most of its profit in its second and third quarters as Americans buy its software in the lead-up to the tax season while the first and fourth quarters are seasonally weak as its the tax filing off-season. Finally, it should be mentioned that Intuit has a trailing P/E of 28.71 and a forward P/E of 18.43 along with a forward dividend of $0.76 for a 1% dividend yield to help investors offset the cost of their software. On Tuesday, large cap Intuit rose 0.49% to $73.74 (INTU has a 52 week trading range of $55.54 to $82.40 a share) for a market cap of $20.89 billion plus the stock is down 3.7% since the start of the year, up 14% over the past year and up 165.9% over the past five years.

Finally, here is a look at the long term performance of JTH Holding, H & R Block and Intuit:

As you can see from the above performance chart, accounting and tax software maker Intuit has been the steady long term performance winner albeit JTH Holding has put in a rather decent show for the last two years and H & R Block has given a mixed long term performance.