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.
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
HPQ's Return On Assets of 7.47% is fine compared to the rest of the industry. HPQ outperforms 78.13% of its industry peers.
The Return On Invested Capital of HPQ (27.71%) is better than 93.75% 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 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 75.00% of its industry peers.
In the last couple of years the Profit Margin of HPQ has declined.
HPQ's Operating Margin of 7.95% is fine compared to the rest of the industry. HPQ outperforms 71.88% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
The Gross Margin of HPQ (22.13%) is worse than 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
HPQ has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
HPQ has more shares outstanding than it did 1 year ago.
HPQ has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HPQ has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.98 indicates that HPQ is not a great score, but indicates only limited risk for bankruptcy at the moment.
HPQ has a Altman-Z score (1.98) which is in line with its industry peers.
HPQ has a debt to FCF ratio of 2.74. This is a good value and a sign of high solvency as HPQ would need 2.74 years to pay back of all of its debts.
The Debt to FCF ratio of HPQ (2.74) is better than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | 1.98 |
ROIC/WACC2.67
WACC10.36%
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.
Looking at the last year, HPQ shows a decrease in Revenue. The Revenue has decreased by -2.39% in the last year.
The Revenue has been decreasing by -1.68% on average over the past years.
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
A Price/Earnings ratio of 11.08 indicates a reasonable valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaper than 84.38% of the companies in the same industry.
HPQ is valuated cheaply when we compare the Price/Earnings ratio to 29.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 10.23, the valuation of HPQ can be described as reasonable.
HPQ's Price/Forward Earnings ratio is rather cheap when compared to the industry. HPQ is cheaper than 81.25% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.84. HPQ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.08 | ||
| Fwd PE | 10.23 |
4.2 Price Multiples
84.38% of the companies in the same industry are more expensive than HPQ, based on the Enterprise Value to EBITDA ratio.
87.50% 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 | 10.22 | ||
| EV/EBITDA | 8.48 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)3.39
PEG (5Y)1.07
EPS Next 2Y4.88%
EPS Next 3Y5.87%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 2.95%. Purely for dividend investing, there may be better candidates out there.
HPQ's Dividend Yield is rather good when compared to the industry average which is at 2.85. HPQ pays more dividend than 96.88% of the companies in the same industry.
HPQ's Dividend Yield is a higher than the S&P500 average which is at 2.21.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
5.2 History
On average, the dividend of HPQ grows each year by 13.46%, which is quite nice.
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)13.46%
Div Incr Years13
Div Non Decr Years33
5.3 Sustainability
HPQ pays out 37.71% 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.
DP37.71%
EPS Next 2Y4.88%
EPS Next 3Y5.87%
HP INC
NYSE:HPQ (11/12/2024, 2:31:09 PM)
37.245
-0.43 (-1.13%)
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 Cap35.89B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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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 (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.08 | ||
| Fwd PE | 10.23 | ||
| 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)3.39
PEG (5Y)1.07
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