HP INC (HPQ) Stock Fundamental Analysis
NYSE:HPQ - New York Stock Exchange, Inc. - US40434L1052 - Common Stock - Currency: USD
HPQ gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HPQ is valued quite cheap, but it does not seem to be growing. HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year HPQ was profitable.
HPQ had a positive operating cash flow in the past year.
Each year in the past 5 years HPQ has been profitable.
HPQ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HPQ's Return On Assets of 6.95% is amongst the best of the industry. HPQ outperforms 80.65% of its industry peers.
HPQ has a Return On Invested Capital of 31.55%. This is amongst the best in the industry. HPQ outperforms 90.32% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HPQ is significantly above the industry average of 17.13%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROIC | 31.55% |
ROA(3y)7.97%
ROA(5y)9.79%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.68%
ROIC(5y)36.41%
1.3 Margins
With a decent Profit Margin value of 5.18%, HPQ is doing good in the industry, outperforming 70.97% of the companies in the same industry.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
Looking at the Operating Margin, with a value of 7.85%, HPQ is in the better half of the industry, outperforming 67.74% of the companies in the same industry.
HPQ's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 22.07%, HPQ is doing worse than 70.97% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HPQ is creating value.
The number of shares outstanding for HPQ has been reduced compared to 1 year ago.
The number of shares outstanding for HPQ has been reduced compared to 5 years ago.
HPQ has a better debt/assets ratio than last year.
2.2 Solvency
HPQ has an Altman-Z score of 1.83. This is not the best score and indicates that HPQ is in the grey zone with still only limited risk for bankruptcy at the moment.
HPQ has a Altman-Z score of 1.83. This is comparable to the rest of the industry: HPQ outperforms 48.39% of its industry peers.
HPQ has a debt to FCF ratio of 3.06. This is a good value and a sign of high solvency as HPQ would need 3.06 years to pay back of all of its debts.
HPQ's Debt to FCF ratio of 3.06 is fine compared to the rest of the industry. HPQ outperforms 77.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | 1.83 |
ROIC/WACC3.97
WACC7.95%
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.
HPQ's Current ratio of 0.72 is on the low side compared to the rest of the industry. HPQ is outperformed by 93.55% of its industry peers.
A Quick Ratio of 0.45 indicates that HPQ may have some problems paying its short term obligations.
The Quick ratio of HPQ (0.45) is worse than 93.55% 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.
Looking at the last year, HPQ shows a decrease in Revenue. The Revenue has decreased by -0.30% in the last year.
Measured over the past years, HPQ shows a decrease in Revenue. The Revenue has been decreasing by -1.84% on average per year.
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.
Based on estimates for the next years, HPQ will show a small growth in Revenue. The Revenue will grow by 1.11% on average per year.
EPS Next Y6.69%
EPS Next 2Y5.56%
EPS Next 3Y6.31%
EPS Next 5Y5.13%
Revenue Next Year2.58%
Revenue Next 2Y2.75%
Revenue Next 3Y2.09%
Revenue Next 5Y1.11%
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 10.22, which indicates a very decent valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 93.55% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.63. HPQ is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 9.57 indicates a reasonable valuation of HPQ.
Compared to the rest of the industry, the Price/Forward 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/Forward Earnings ratio is at 22.68. HPQ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.22 | ||
| Fwd PE | 9.57 |
4.2 Price Multiples
90.32% of the companies in the same industry are more expensive than HPQ, based on the Enterprise Value to EBITDA ratio.
96.77% 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 | 10.29 | ||
| EV/EBITDA | 7.74 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
HPQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.53
PEG (5Y)1.17
EPS Next 2Y5.56%
EPS Next 3Y6.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.48%, 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 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y5.56%
EPS Next 3Y6.31%
34.63
-0.09 (-0.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners80.54%
Inst Owner Change-2.09%
Ins Owners0.18%
Ins Owner Change4.48%
Market Cap32.48B
Analysts67
Price Target37.15 (7.28%)
Short Float %2.89%
Short Ratio4.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
Yearly Dividend1.12
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)-0.11%
PT rev (3m)3.19%
EPS NQ rev (1m)-4.41%
EPS NQ rev (3m)-16.73%
EPS NY rev (1m)0.11%
EPS NY rev (3m)-0.67%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-4.16%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.22 | ||
| Fwd PE | 9.57 | ||
| P/S | 0.61 | ||
| P/FCF | 10.29 | ||
| P/OCF | 8.66 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.74 |
EPS(TTM)3.39
EY9.79%
EPS(NY)3.62
Fwd EY10.44%
FCF(TTM)3.37
FCFY9.72%
OCF(TTM)4
OCFY11.54%
SpS57.11
BVpS-1.41
TBVpS-12.02
PEG (NY)1.53
PEG (5Y)1.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROCE | 37.44% | ||
| ROIC | 31.55% | ||
| ROICexc | 44.36% | ||
| 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)31.68%
ROIC(5y)36.41%
ROICexc(3y)43.22%
ROICexc(5y)62.59%
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-19.23%
ROICexc growth 5Y-14.33%
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 | 1.65 | ||
| Cap/Depr | 71.33% | ||
| Cap/Sales | 1.11% | ||
| Interest Coverage | 9.53 | ||
| Cash Conversion | 74.5% | ||
| Profit Quality | 113.77% | ||
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.83 |
F-Score6
WACC7.95%
ROIC/WACC3.97
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 Y6.69%
EPS Next 2Y5.56%
EPS Next 3Y6.31%
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 Year2.58%
Revenue Next 2Y2.75%
Revenue Next 3Y2.09%
Revenue Next 5Y1.11%
EBIT growth 1Y-0.5%
EBIT growth 3Y-9.21%
EBIT growth 5Y0.07%
EBIT Next Year17.78%
EBIT Next 3Y4.59%
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%