HP INC (HPQ) Stock Fundamental Analysis
USA - NYSE:HPQ - US40434L1052 - Common Stock
28.24 USD
+0.34 (+1.22%)
28.24 USD
0 (0%)
HPQ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 33 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ belongs to the best of the industry regarding profitability, there are concerns on its financial health. HPQ is cheap, but on the other hand it scores bad on growth. HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HPQ had positive earnings in the past year.
In the past year HPQ had a positive cash flow from operations.
HPQ had positive earnings in each of the past 5 years.
In the past 5 years HPQ always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of HPQ (6.62%) is better than 78.79% of its industry peers.
HPQ's Return On Invested Capital of 25.92% is amongst the best of the industry. HPQ outperforms 93.94% of its industry peers.
HPQ had an Average Return On Invested Capital over the past 3 years of 31.68%. This is significantly above the industry average of 14.98%.
The 3 year average ROIC (31.68%) for HPQ is well above the current ROIC(25.92%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.62% | ||
| ROE | N/A | ||
| ROIC | 25.92% |
ROA(3y)7.97%
ROA(5y)9.81%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.68%
ROIC(5y)36.51%
1.3 Margins
HPQ has a better Profit Margin (4.83%) than 75.76% of its industry peers.
HPQ's Profit Margin has been stable in the last couple of years.
The Operating Margin of HPQ (6.71%) is better than 63.64% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
HPQ has a Gross Margin of 20.89%. This is in the lower half of the industry: HPQ underperforms 69.70% of its industry peers.
HPQ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.71% | ||
| PM (TTM) | 4.83% | ||
| GM | 20.89% |
OM growth 3Y-4.29%
OM growth 5Y1.94%
PM growth 3Y-20.49%
PM growth 5Y-0.69%
GM growth 3Y1.46%
GM growth 5Y3.02%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HPQ is creating value.
HPQ has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HPQ has been reduced compared to 5 years ago.
The debt/assets ratio for HPQ has been reduced compared to a year ago.
2.2 Solvency
HPQ has a debt to FCF ratio of 3.38. This is a good value and a sign of high solvency as HPQ would need 3.38 years to pay back of all of its debts.
HPQ has a better Debt to FCF ratio (3.38) than 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.38 | ||
| Altman-Z | N/A |
ROIC/WACC3.49
WACC7.42%
2.3 Liquidity
A Current Ratio of 0.74 indicates that HPQ may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.74, HPQ is doing worse than 90.91% of the companies in the same industry.
HPQ has a Quick Ratio of 0.74. This is a bad value and indicates that HPQ is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.44, HPQ is not doing good in the industry: 87.88% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The earnings per share for HPQ have decreased by -6.85% in the last year.
Measured over the past years, HPQ shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.74% on average per year.
The Revenue has been growing slightly by 2.61% in the past year.
HPQ shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.84% yearly.
EPS 1Y (TTM)-6.85%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-9.64%
Revenue 1Y (TTM)2.61%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.05%
3.2 Future
HPQ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.13% yearly.
The Revenue is expected to grow by 1.32% on average over the next years.
EPS Next Y-6.49%
EPS Next 2Y0.17%
EPS Next 3Y2.43%
EPS Next 5Y2.13%
Revenue Next Year2.88%
Revenue Next 2Y2.21%
Revenue Next 3Y2.02%
Revenue Next 5Y1.32%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 9.02, which indicates a very decent valuation of HPQ.
96.97% of the companies in the same industry are more expensive than HPQ, based on the Price/Earnings ratio.
HPQ's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.41.
HPQ is valuated reasonably with a Price/Forward Earnings ratio of 8.30.
HPQ's Price/Forward Earnings ratio is rather cheap when compared to the industry. HPQ is cheaper than 84.85% of the companies in the same industry.
HPQ's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.02 | ||
| Fwd PE | 8.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaper than 93.94% of the companies in the same industry.
84.85% of the companies in the same industry are more expensive than HPQ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.28 | ||
| EV/EBITDA | 7.15 |
4.3 Compensation for Growth
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.03
EPS Next 2Y0.17%
EPS Next 3Y2.43%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.08%, which is a nice return.
HPQ's Dividend Yield is rather good when compared to the industry average which is at 1.85. HPQ pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.08% |
5.2 History
On average, the dividend of HPQ grows each year by 11.65%, which is quite nice.
HPQ has been paying a dividend for at least 10 years, so it has a reliable track record.
HPQ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.65%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
HPQ pays out 40.95% of its income as dividend. This is a bit on the high side, but may be sustainable.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP40.95%
EPS Next 2Y0.17%
EPS Next 3Y2.43%
28.24
+0.34 (+1.22%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.52%
Inst Owner Change-0.49%
Ins Owners0.2%
Ins Owner Change2.25%
Market Cap26.40B
Analysts66.67
Price Target28.37 (0.46%)
Short Float %3.76%
Short Ratio4.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.08% |
Yearly Dividend1.12
Dividend Growth(5Y)11.65%
DP40.95%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.84%
Min EPS beat(2)-12.57%
Max EPS beat(2)-1.12%
EPS beat(4)0
Avg EPS beat(4)-4.04%
Min EPS beat(4)-12.57%
Max EPS beat(4)-0.96%
EPS beat(8)1
Avg EPS beat(8)-2.81%
EPS beat(12)3
Avg EPS beat(12)-1.67%
EPS beat(16)6
Avg EPS beat(16)-0.46%
Revenue beat(2)1
Avg Revenue beat(2)0.15%
Min Revenue beat(2)-0.41%
Max Revenue beat(2)0.72%
Revenue beat(4)2
Avg Revenue beat(4)-0.04%
Min Revenue beat(4)-0.5%
Max Revenue beat(4)0.72%
Revenue beat(8)4
Avg Revenue beat(8)-0.55%
Revenue beat(12)4
Avg Revenue beat(12)-1.07%
Revenue beat(16)7
Avg Revenue beat(16)-0.68%
PT rev (1m)3.04%
PT rev (3m)-0.49%
EPS NQ rev (1m)0.3%
EPS NQ rev (3m)0.35%
EPS NY rev (1m)0.75%
EPS NY rev (3m)-9.39%
Revenue NQ rev (1m)1.36%
Revenue NQ rev (3m)1.45%
Revenue NY rev (1m)0.62%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.02 | ||
| Fwd PE | 8.3 | ||
| P/S | 0.48 | ||
| P/FCF | 9.28 | ||
| P/OCF | 7.14 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.15 |
EPS(TTM)3.13
EY11.08%
EPS(NY)3.4
Fwd EY12.04%
FCF(TTM)3.04
FCFY10.77%
OCF(TTM)3.95
OCFY14%
SpS58.53
BVpS-0.96
TBVpS-10.29
PEG (NY)N/A
PEG (5Y)1.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.62% | ||
| ROE | N/A | ||
| ROCE | 30.63% | ||
| ROIC | 25.92% | ||
| ROICexc | 34.09% | ||
| ROICexgc | 773.03% | ||
| OM | 6.71% | ||
| PM (TTM) | 4.83% | ||
| GM | 20.89% | ||
| FCFM | 5.2% |
ROA(3y)7.97%
ROA(5y)9.81%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.68%
ROIC(5y)36.51%
ROICexc(3y)43.22%
ROICexc(5y)62.78%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)37.59%
ROCE(5y)43.81%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.53%
ROICexc growth 5Y-14.33%
OM growth 3Y-4.29%
OM growth 5Y1.94%
PM growth 3Y-20.49%
PM growth 5Y-0.69%
GM growth 3Y1.46%
GM growth 5Y3.02%
F-Score5
Asset Turnover1.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.38 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 93.12% | ||
| Cap/Sales | 1.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.56% | ||
| Profit Quality | 107.69% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | N/A |
F-Score5
WACC7.42%
ROIC/WACC3.49
Cap/Depr(3y)81.46%
Cap/Depr(5y)78.41%
Cap/Sales(3y)1.17%
Cap/Sales(5y)1.09%
Profit Quality(3y)107.26%
Profit Quality(5y)108.45%
High Growth Momentum
Growth
EPS 1Y (TTM)-6.85%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-9.64%
EPS Next Y-6.49%
EPS Next 2Y0.17%
EPS Next 3Y2.43%
EPS Next 5Y2.13%
Revenue 1Y (TTM)2.61%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.05%
Revenue Next Year2.88%
Revenue Next 2Y2.21%
Revenue Next 3Y2.02%
Revenue Next 5Y1.32%
EBIT growth 1Y-13.36%
EBIT growth 3Y-9.55%
EBIT growth 5Y0.07%
EBIT Next Year9.32%
EBIT Next 3Y3.63%
EBIT Next 5Y0.31%
FCF growth 1Y-1.86%
FCF growth 3Y-18.48%
FCF growth 5Y-4.54%
OCF growth 1Y5.6%
OCF growth 3Y-16.37%
OCF growth 5Y-4.23%