HP INC (HPQ)
US40434L1052 - Common Stock
Overall HPQ gets a fundamental rating of 5 out of 10. We evaluated HPQ against 31 industry peers in the Technology Hardware, Storage & Peripherals industry. HPQ has an excellent profitability rating, but there are concerns on its financial health. HPQ is valued quite cheap, but it does not seem to be growing. Finally HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HPQ had positive earnings in the past year.
HPQ had a positive operating cash flow in the past year.
In the past 5 years HPQ has always been profitable.
In the past 5 years HPQ always reported a positive cash flow from operatings.
1.2 Ratios
HPQ has a Return On Assets of 6.95%. This is amongst the best in the industry. HPQ outperforms 80.65% of its industry peers.
HPQ has a better Return On Invested Capital (31.69%) than 93.55% of its industry peers.
HPQ had an Average Return On Invested Capital over the past 3 years of 31.73%. This is significantly above the industry average of 15.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROIC | 31.69% |
ROA(3y)7.97%
ROA(5y)9.79%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.73%
ROIC(5y)36.43%
1.3 Margins
Looking at the Profit Margin, with a value of 5.18%, HPQ is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
HPQ's Profit Margin has been stable in the last couple of years.
HPQ has a better Operating Margin (7.85%) than 74.19% of its industry peers.
HPQ's Operating Margin has improved in the last couple of years.
The Gross Margin of HPQ (22.07%) is worse than 70.97% of its industry peers.
HPQ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.85% | ||
| PM (TTM) | 5.18% | ||
| GM | 22.07% |
OM growth 3Y-3.92%
OM growth 5Y1.94%
PM growth 3Y-20.32%
PM growth 5Y-0.69%
GM growth 3Y1.45%
GM growth 5Y3.02%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HPQ is creating value.
Compared to 1 year ago, HPQ has less shares outstanding
HPQ has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HPQ has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of HPQ is 3.06, which is a good value as it means it would take HPQ, 3.06 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.06, HPQ is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | N/A |
ROIC/WACC2.68
WACC11.84%
2.3 Liquidity
HPQ has a Current Ratio of 0.72. This is a bad value and indicates that HPQ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.72, HPQ is doing worse than 96.77% of the companies in the same industry.
A Quick Ratio of 0.45 indicates that HPQ may have some problems paying its short term obligations.
HPQ's Quick ratio of 0.45 is on the low side compared to the rest of the industry. HPQ is outperformed by 96.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.42% over the past year.
The Earnings Per Share has been growing by 8.74% on average over the past years. This is quite good.
HPQ shows a decrease in Revenue. In the last year, the revenue decreased by -0.30%.
HPQ shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.84% yearly.
EPS 1Y (TTM)2.42%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%3.33%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y-5.51%
Revenue growth 5Y-1.84%
Sales Q2Q%1.72%
3.2 Future
The Earnings Per Share is expected to grow by 5.13% on average over the next years.
The Revenue is expected to grow by 1.11% on average over the next years.
EPS Next Y7.28%
EPS Next 2Y7.65%
EPS Next 3Y6.28%
EPS Next 5Y5.13%
Revenue Next Year3.27%
Revenue Next 2Y3.22%
Revenue Next 3Y2.07%
Revenue Next 5Y1.11%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.72 indicates a reasonable valuation of HPQ.
Compared to the rest of the industry, the Price/Earnings ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 90.32% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.73. HPQ is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 9.06 indicates a reasonable valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 87.10% 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 22.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.72 | ||
| Fwd PE | 9.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaply inside the industry as 90.32% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 93.55% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.06 | ||
| EV/EBITDA | 7.49 |
4.3 Compensation for Growth
HPQ's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)1.33
PEG (5Y)1.11
EPS Next 2Y7.65%
EPS Next 3Y6.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.57%, HPQ has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.03, HPQ pays a better dividend. On top of this HPQ pays more dividend than 96.77% of the companies listed in the same industry.
HPQ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 11.65%!
HPQ has paid a dividend for at least 10 years, which is 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 Years13
Div Non Decr Years33
5.3 Sustainability
HPQ pays out 38.74% of its income as dividend. This is a sustainable payout ratio.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.74%
EPS Next 2Y7.65%
EPS Next 3Y6.28%
HP INC
NYSE:HPQ (12/20/2024, 8:17:03 PM)
After market: 32.94 0 (0%)32.94
+0.48 (+1.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners80.54%
Inst Owner Change2.56%
Ins Owners0.18%
Ins Owner Change6.97%
Market Cap30.89B
Analysts67.62
Price Target37.1 (12.63%)
Short Float %3.53%
Short Ratio4.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
Dividend Growth(5Y)11.65%
DP38.74%
Div Incr Years13
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.69%
Min EPS beat(2)-4.43%
Max EPS beat(2)-0.96%
EPS beat(4)1
Avg EPS beat(4)-1.6%
Min EPS beat(4)-4.43%
Max EPS beat(4)0.02%
EPS beat(8)2
Avg EPS beat(8)-0.67%
EPS beat(12)5
Avg EPS beat(12)0.2%
EPS beat(16)9
Avg EPS beat(16)3.25%
Revenue beat(2)1
Avg Revenue beat(2)-0.21%
Min Revenue beat(2)-0.5%
Max Revenue beat(2)0.07%
Revenue beat(4)2
Avg Revenue beat(4)-0.9%
Min Revenue beat(4)-3.75%
Max Revenue beat(4)0.59%
Revenue beat(8)2
Avg Revenue beat(8)-1.54%
Revenue beat(12)4
Avg Revenue beat(12)-1.5%
Revenue beat(16)7
Avg Revenue beat(16)-0.47%
PT rev (1m)3.06%
PT rev (3m)0.32%
EPS NQ rev (1m)-12.89%
EPS NQ rev (3m)-12.89%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)-0.3%
Revenue NQ rev (1m)-3.6%
Revenue NQ rev (3m)-3.6%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.72 | ||
| Fwd PE | 9.06 | ||
| P/S | 0.59 | ||
| P/FCF | 10.06 | ||
| P/OCF | 8.47 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.49 |
EPS(TTM)3.39
EY10.29%
EPS(NY)3.64
Fwd EY11.04%
FCF(TTM)3.28
FCFY9.94%
OCF(TTM)3.89
OCFY11.81%
SpS55.58
BVpS-1.37
TBVpS-10.32
PEG (NY)1.33
PEG (5Y)1.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROCE | 37.44% | ||
| ROIC | 31.69% | ||
| ROICexc | 44.62% | ||
| ROICexgc | N/A | ||
| OM | 7.85% | ||
| PM (TTM) | 5.18% | ||
| GM | 22.07% | ||
| FCFM | 5.89% |
ROA(3y)7.97%
ROA(5y)9.79%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.73%
ROIC(5y)36.43%
ROICexc(3y)43.31%
ROICexc(5y)62.65%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)37.59%
ROCE(5y)43.67%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.07%
ROICexc growth 5Y-14.22%
OM growth 3Y-3.92%
OM growth 5Y1.94%
PM growth 3Y-20.32%
PM growth 5Y-0.69%
GM growth 3Y1.45%
GM growth 5Y3.02%
F-Score6
Asset Turnover1.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.06 | ||
| Debt/EBITDA | 1.64 | ||
| Cap/Depr | 71.33% | ||
| Cap/Sales | 1.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.5% | ||
| Profit Quality | 113.77% | ||
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | N/A |
F-Score6
WACC11.84%
ROIC/WACC2.68
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)108.55%
High Growth Momentum
Growth
EPS 1Y (TTM)2.42%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%3.33%
EPS Next Y7.28%
EPS Next 2Y7.65%
EPS Next 3Y6.28%
EPS Next 5Y5.13%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y-5.51%
Revenue growth 5Y-1.84%
Sales Q2Q%1.72%
Revenue Next Year3.27%
Revenue Next 2Y3.22%
Revenue Next 3Y2.07%
Revenue Next 5Y1.11%
EBIT growth 1Y-0.5%
EBIT growth 3Y-9.21%
EBIT growth 5Y0.07%
EBIT Next Year17.98%
EBIT Next 3Y3.92%
EBIT Next 5Y1.51%
FCF growth 1Y6.58%
FCF growth 3Y-18.48%
FCF growth 5Y-4.54%
OCF growth 1Y4.98%
OCF growth 3Y-16.37%
OCF growth 5Y-4.23%