HP INC (HPQ) Stock Fundamental Analysis
NYSE:HPQ - New York Stock Exchange, Inc. - US40434L1052 - Common Stock - Currency: USD
Taking everything into account, HPQ scores 5 out of 10 in our fundamental rating. HPQ was compared to 32 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
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.
Each year in the past 5 years HPQ had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 6.49%, HPQ belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
With an excellent Return On Invested Capital value of 26.59%, HPQ belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HPQ is significantly above the industry average of 16.14%.
The last Return On Invested Capital (26.59%) for HPQ is well below the 3 year average (31.68%), which needs to be investigated, but indicates that HPQ had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | N/A | ||
| ROIC | 26.59% |
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
The Profit Margin of HPQ (4.64%) is better than 75.00% of its industry peers.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
HPQ's Operating Margin of 7.08% is fine compared to the rest of the industry. HPQ outperforms 62.50% of its industry peers.
HPQ's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 21.15%, HPQ is doing worse than 68.75% of the companies in the same industry.
HPQ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.08% | ||
| PM (TTM) | 4.64% | ||
| GM | 21.15% |
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
Compared to 1 year ago, HPQ has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of HPQ is 4.04, which is a neutral value as it means it would take HPQ, 4.04 years of fcf income to pay off all of its debts.
HPQ has a better Debt to FCF ratio (4.04) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.04 | ||
| Altman-Z | N/A |
ROIC/WACC3.53
WACC7.54%
2.3 Liquidity
HPQ has a Current Ratio of 0.73. 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 Current ratio of 0.73. This is amonst the worse of the industry: HPQ underperforms 90.63% of its industry peers.
HPQ has a Quick Ratio of 0.73. 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 0.42, HPQ is not doing good in the industry: 90.63% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.42 |
3. Growth
3.1 Past
The earnings per share for HPQ have decreased by -5.31% in the last year.
The Earnings Per Share has been growing by 8.74% on average over the past years. This is quite good.
The Revenue has been growing slightly by 2.45% in the past 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)-5.31%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-13.41%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.28%
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 2.51% on average per year.
HPQ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.01% yearly.
EPS Next Y-7.19%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
EPS Next 5Y2.51%
Revenue Next Year2.17%
Revenue Next 2Y1.86%
Revenue Next 3Y1.91%
Revenue Next 5Y1.01%
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 7.92 indicates a rather cheap valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaper than 93.75% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.47. HPQ is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 7.48 indicates a rather cheap 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 84.38% of the companies listed 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 21.91.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 7.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaply inside the industry as 96.88% of the companies are valued more expensively.
HPQ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HPQ is cheaper than 96.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.01 | ||
| EV/EBITDA | 6.92 |
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)0.91
EPS Next 2Y0.15%
EPS Next 3Y2.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.45%, HPQ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.92, HPQ pays a better dividend. On top of this HPQ pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 11.65%!
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
42.79% of the earnings are spent on dividend by HPQ. 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.
DP42.79%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
25.42
-0.31 (-1.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.45%
Inst Owner Change0%
Ins Owners0.2%
Ins Owner Change-0.75%
Market Cap23.96B
Analysts66.67
Price Target27.57 (8.46%)
Short Float %3.14%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
Yearly Dividend1.12
Dividend Growth(5Y)11.65%
DP42.79%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.03%
Min EPS beat(2)-12.57%
Max EPS beat(2)-1.5%
EPS beat(4)0
Avg EPS beat(4)-4.86%
Min EPS beat(4)-12.57%
Max EPS beat(4)-0.96%
EPS beat(8)1
Avg EPS beat(8)-2.77%
EPS beat(12)3
Avg EPS beat(12)-1.65%
EPS beat(16)7
Avg EPS beat(16)-0.2%
Revenue beat(2)1
Avg Revenue beat(2)-0.18%
Min Revenue beat(2)-0.41%
Max Revenue beat(2)0.04%
Revenue beat(4)2
Avg Revenue beat(4)-0.2%
Min Revenue beat(4)-0.5%
Max Revenue beat(4)0.07%
Revenue beat(8)3
Avg Revenue beat(8)-0.92%
Revenue beat(12)3
Avg Revenue beat(12)-1.79%
Revenue beat(16)6
Avg Revenue beat(16)-1.03%
PT rev (1m)-3.31%
PT rev (3m)-25.78%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-20.37%
EPS NY rev (1m)-10.07%
EPS NY rev (3m)-12.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.58%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)-1.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 7.48 | ||
| P/S | 0.44 | ||
| P/FCF | 9.01 | ||
| P/OCF | 6.93 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.92 |
EPS(TTM)3.21
EY12.63%
EPS(NY)3.4
Fwd EY13.38%
FCF(TTM)2.82
FCFY11.1%
OCF(TTM)3.67
OCFY14.43%
SpS57.6
BVpS-1.35
TBVpS-10.6
PEG (NY)N/A
PEG (5Y)0.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | N/A | ||
| ROCE | 31.41% | ||
| ROIC | 26.59% | ||
| ROICexc | 34.21% | ||
| ROICexgc | 406.86% | ||
| OM | 7.08% | ||
| PM (TTM) | 4.64% | ||
| GM | 21.15% | ||
| FCFM | 4.9% |
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 Turnover1.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.04 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 97.8% | ||
| Cap/Sales | 1.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.16% | ||
| Profit Quality | 105.64% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.42 | ||
| Altman-Z | N/A |
F-Score5
WACC7.54%
ROIC/WACC3.53
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)-5.31%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-13.41%
EPS Next Y-7.19%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
EPS Next 5Y2.51%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.28%
Revenue Next Year2.17%
Revenue Next 2Y1.86%
Revenue Next 3Y1.91%
Revenue Next 5Y1.01%
EBIT growth 1Y-10.66%
EBIT growth 3Y-9.55%
EBIT growth 5Y0.07%
EBIT Next Year13.8%
EBIT Next 3Y4.08%
EBIT Next 5Y0.31%
FCF growth 1Y17.81%
FCF growth 3Y-18.48%
FCF growth 5Y-4.54%
OCF growth 1Y18.54%
OCF growth 3Y-16.37%
OCF growth 5Y-4.23%