HP INC (HPQ)
US40434L1052 - Common Stock
Overall HPQ gets a fundamental rating of 5 out of 10. We evaluated HPQ against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ has a great profitability rating, there are some minor concerns on its financial health. HPQ is cheap, but on the other hand it scores bad on growth. Finally 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.
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
Looking at the Return On Assets, with a value of 7.47%, HPQ is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
HPQ's Return On Invested Capital of 27.71% is amongst the best of the industry. HPQ outperforms 93.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HPQ is significantly above the industry average of 16.81%.
The 3 year average ROIC (31.74%) for HPQ is well above the current ROIC(27.71%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.47% | ||
| ROE | N/A | ||
| ROIC | 27.71% |
ROA(3y)11.27%
ROA(5y)10.28%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.74%
ROIC(5y)33.13%
1.3 Margins
HPQ's Profit Margin of 5.33% is fine compared to the rest of the industry. HPQ outperforms 71.88% of its industry peers.
In the last couple of years the Profit Margin of HPQ has declined.
Looking at the Operating Margin, with a value of 7.95%, HPQ is in the better half of the industry, outperforming 71.88% of the companies in the same industry.
HPQ's Operating Margin has improved in the last couple of years.
HPQ has a Gross Margin of 22.13%. This is in the lower half of the industry: HPQ underperforms 71.88% of its industry peers.
In the last couple of years the Gross Margin of HPQ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.95% | ||
| PM (TTM) | 5.33% | ||
| GM | 22.13% |
OM growth 3Y4.16%
OM growth 5Y2.38%
PM growth 3Y6.55%
PM growth 5Y-7.79%
GM growth 3Y5.15%
GM growth 5Y3.26%
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 increased compared to 1 year ago.
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
HPQ has an Altman-Z score of 1.96. 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.
Looking at the Altman-Z score, with a value of 1.96, HPQ is in line with its industry, outperforming 59.38% of the companies in the same industry.
The Debt to FCF ratio of HPQ is 2.74, which is a good value as it means it would take HPQ, 2.74 years of fcf income to pay off all of its debts.
HPQ has a better Debt to FCF ratio (2.74) than 78.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | 1.96 |
ROIC/WACC2.64
WACC10.48%
2.3 Liquidity
A Current Ratio of 0.71 indicates that HPQ may have some problems paying its short term obligations.
HPQ's Current ratio of 0.71 is on the low side compared to the rest of the industry. HPQ is outperformed by 96.88% of its industry peers.
A Quick Ratio of 0.43 indicates that HPQ may have some problems paying its short term obligations.
HPQ has a Quick ratio of 0.43. This is amonst the worse of the industry: HPQ underperforms 96.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.07% over the past year.
HPQ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.38% yearly.
The Revenue has decreased by -2.39% in the past year.
Measured over the past years, HPQ shows a decrease in Revenue. The Revenue has been decreasing by -1.68% on average per year.
EPS 1Y (TTM)3.07%
EPS 3Y13.4%
EPS 5Y10.38%
EPS Q2Q%-3.49%
Revenue 1Y (TTM)-2.39%
Revenue growth 3Y-1.75%
Revenue growth 5Y-1.68%
Sales Q2Q%2.45%
3.2 Future
HPQ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.83% yearly.
The Revenue is expected to grow by 0.84% on average over the next years.
EPS Next Y3.27%
EPS Next 2Y4.88%
EPS Next 3Y5.87%
EPS Next 5Y5.83%
Revenue Next Year-0.6%
Revenue Next 2Y1.37%
Revenue Next 3Y1.96%
Revenue Next 5Y0.84%
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
The Price/Earnings ratio is 11.28, which indicates a very decent valuation of HPQ.
HPQ's Price/Earnings ratio is rather cheap when compared to the industry. HPQ is cheaper than 87.50% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.96. HPQ is valued rather cheaply when compared to this.
HPQ is valuated reasonably with a Price/Forward Earnings ratio of 10.41.
71.88% of the companies in the same industry are more expensive than HPQ, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HPQ to the average of the S&P500 Index (23.82), we can say HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.28 | ||
| Fwd PE | 10.41 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HPQ is valued cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.4 | ||
| EV/EBITDA | 8.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HPQ does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)3.45
PEG (5Y)1.09
EPS Next 2Y4.88%
EPS Next 3Y5.87%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 3.02%.
HPQ's Dividend Yield is rather good when compared to the industry average which is at 2.98. HPQ pays more dividend than 96.88% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, HPQ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.02% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 13.46%!
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)13.46%
Div Incr Years13
Div Non Decr Years33
5.3 Sustainability
37.71% of the earnings are spent on dividend by HPQ. This is a low number and sustainable payout ratio.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP37.71%
EPS Next 2Y4.88%
EPS Next 3Y5.87%
HP INC
NYSE:HPQ (11/21/2024, 6:40:00 PM)
After market: 37.9 -0.01 (-0.03%)37.91
+1.23 (+3.35%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap36.53B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.02% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.28 | ||
| Fwd PE | 10.41 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.45
PEG (5Y)1.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.47% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.95% | ||
| PM (TTM) | 5.33% | ||
| GM | 22.13% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)3.07%
EPS 3Y13.4%
EPS 5Y
EPS Q2Q%
EPS Next Y3.27%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.39%
Revenue growth 3Y-1.75%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y