HP INC (HPQ) Stock Fundamental Analysis
USA - NYSE:HPQ - US40434L1052 - Common Stock
26.28 USD
+0.11 (+0.42%)
26.34 USD
+0.06 (+0.23%)
We assign a fundamental rating of 5 out of 10 to HPQ. HPQ was compared to 35 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.
HPQ had a positive operating cash flow in the past year.
In the past 5 years HPQ has always been profitable.
Each year in the past 5 years HPQ had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 6.62%, HPQ is doing good in the industry, outperforming 80.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 25.92%, HPQ belongs to the best of the industry, outperforming 94.29% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HPQ is significantly above the industry average of 16.54%.
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 77.14% of its industry peers.
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 6.71%, HPQ is in the better half of the industry, outperforming 65.71% of the companies in the same industry.
In the last couple of years the Operating Margin of HPQ has grown nicely.
The Gross Margin of HPQ (20.89%) is worse than 65.71% of its industry peers.
In the last couple of years the Gross Margin of HPQ has grown nicely.
| 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
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
Compared to 5 years ago, HPQ has less shares outstanding
HPQ has a better debt/assets ratio than last year.
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 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.38 | ||
| Altman-Z | N/A |
ROIC/WACC3.51
WACC7.39%
2.3 Liquidity
A Current Ratio of 0.74 indicates that HPQ may have some problems paying its short term obligations.
HPQ's Current ratio of 0.74 is on the low side compared to the rest of the industry. HPQ is outperformed by 88.57% of its industry peers.
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.
HPQ has a Quick ratio of 0.44. This is amonst the worse of the industry: HPQ underperforms 88.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
HPQ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.85%.
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 small growth in Revenue. The Revenue has grown by 2.61% 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)-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
Based on estimates for the next years, HPQ will show a small growth in Earnings Per Share. The EPS will grow by 2.13% on average per year.
HPQ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.32% yearly.
EPS Next Y-7.21%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
EPS Next 5Y2.13%
Revenue Next Year2.98%
Revenue Next 2Y2.34%
Revenue Next 3Y2.14%
Revenue Next 5Y1.32%
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.
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
HPQ is valuated reasonably with a Price/Earnings ratio of 8.40.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 97.14% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.83, HPQ is valued rather cheaply.
HPQ is valuated cheaply with a Price/Forward Earnings ratio of 7.72.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 91.43% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 32.68. HPQ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.4 | ||
| Fwd PE | 7.72 |
4.2 Price Multiples
97.14% of the companies in the same industry are more expensive than HPQ, based on the Enterprise Value to EBITDA ratio.
HPQ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HPQ is cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.64 | ||
| EV/EBITDA | 6.8 |
4.3 Compensation for Growth
HPQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y0.18%
EPS Next 3Y1.91%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.21%, 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 2.39, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
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.
The dividend of HPQ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.95%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
26.28
+0.11 (+0.42%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.79%
Inst Owner Change-0.16%
Ins Owners0.21%
Ins Owner Change2.89%
Market Cap24.56B
Revenue(TTM)54.71B
Net Income(TTM)2.64B
Analysts66.36
Price Target28.72 (9.28%)
Short Float %5.33%
Short Ratio4.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
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)1.24%
PT rev (3m)4.19%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)0.54%
EPS NY rev (1m)0.07%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0.41%
Revenue NQ rev (3m)1.86%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.4 | ||
| Fwd PE | 7.72 | ||
| P/S | 0.45 | ||
| P/FCF | 8.64 | ||
| P/OCF | 6.65 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.8 |
EPS(TTM)3.13
EY11.91%
EPS(NY)3.4
Fwd EY12.95%
FCF(TTM)3.04
FCFY11.57%
OCF(TTM)3.95
OCFY15.05%
SpS58.53
BVpS-0.96
TBVpS-10.29
PEG (NY)N/A
PEG (5Y)0.96
Graham NumberN/A
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%
ROICexgc growth 3YN/A
ROICexgc 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
WACC7.39%
ROIC/WACC3.51
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-7.21%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
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 Year2.98%
Revenue Next 2Y2.34%
Revenue Next 3Y2.14%
Revenue Next 5Y1.32%
EBIT growth 1Y-13.36%
EBIT growth 3Y-9.55%
EBIT growth 5Y0.07%
EBIT Next Year8.9%
EBIT Next 3Y2.92%
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%
HP INC / HPQ FAQ
Can you provide the ChartMill fundamental rating for HP INC?
ChartMill assigns a fundamental rating of 5 / 10 to HPQ.
What is the valuation status of HP INC (HPQ) stock?
ChartMill assigns a valuation rating of 8 / 10 to HP INC (HPQ). This can be considered as Undervalued.
Can you provide the profitability details for HP INC?
HP INC (HPQ) has a profitability rating of 7 / 10.
What is the valuation of HP INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HP INC (HPQ) is 8.4 and the Price/Book (PB) ratio is -27.26.
Can you provide the dividend sustainability for HPQ stock?
The dividend rating of HP INC (HPQ) is 8 / 10 and the dividend payout ratio is 40.95%.