HP INC (HPQ) Stock Fundamental Analysis
USA - NYSE:HPQ - US40434L1052 - Common Stock
26.64 USD
+0.16 (+0.6%)
26.6895 USD
+0.05 (+0.19%)
HPQ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 33 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ has a great profitability rating, there are quite some 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.
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 has a better Return On Assets (6.62%) than 78.79% of its industry peers.
The Return On Invested Capital of HPQ (25.92%) is better than 93.94% 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 14.92%.
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's Profit Margin of 4.83% is fine compared to the rest of the industry. HPQ outperforms 75.76% of its industry peers.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
With a decent Operating Margin value of 6.71%, HPQ is doing good in the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Operating Margin of HPQ has grown nicely.
HPQ's Gross Margin of 20.89% is on the low side compared to the rest of the industry. HPQ is outperformed by 69.70% of its industry peers.
HPQ's Gross Margin has improved in the last couple of years.
| 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
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 less shares outstanding than it did 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 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 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.38 | ||
| Altman-Z | N/A |
ROIC/WACC3.49
WACC7.42%
2.3 Liquidity
HPQ has a Current 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 worse Current ratio (0.74) than 90.91% of its industry peers.
A Quick Ratio of 0.44 indicates that HPQ may have some problems paying its short term obligations.
HPQ has a worse Quick ratio (0.44) than 90.91% 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.
HPQ shows a small growth in Revenue. In the last year, the Revenue has grown by 2.61%.
The Revenue has been decreasing by -1.84% on average over the past years.
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-7.27%
EPS Next 2Y-0.05%
EPS Next 3Y1.69%
EPS Next 5Y2.13%
Revenue Next Year2.88%
Revenue Next 2Y2.21%
Revenue Next 3Y2.02%
Revenue Next 5Y1.32%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 8.51 indicates a reasonable valuation of HPQ.
96.97% of the companies in the same industry are more expensive than HPQ, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.86, HPQ is valued rather cheaply.
A Price/Forward Earnings ratio of 7.87 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 84.85% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of HPQ to the average of the S&P500 Index (23.32), we can say HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.51 | ||
| Fwd PE | 7.87 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaply inside the industry as 93.94% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 84.85% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.76 | ||
| EV/EBITDA | 6.86 |
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)0.97
EPS Next 2Y-0.05%
EPS Next 3Y1.69%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.37%, which is a nice return.
Compared to an average industry Dividend Yield of 2.17, HPQ pays a better dividend. On top of this HPQ pays more dividend than 96.97% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 11.65%!
HPQ has paid a dividend for at least 10 years, which is 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 Years14
Div Non Decr Years34
5.3 Sustainability
40.95% 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.
DP40.95%
EPS Next 2Y-0.05%
EPS Next 3Y1.69%
26.64
+0.16 (+0.6%)
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-0.49%
Ins Owners0.21%
Ins Owner Change3.16%
Market Cap24.90B
Analysts66.36
Price Target28.59 (7.32%)
Short Float %3.95%
Short Ratio4.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
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)3.04%
PT rev (3m)2.91%
EPS NQ rev (1m)0.3%
EPS NQ rev (3m)0.35%
EPS NY rev (1m)-0.84%
EPS NY rev (3m)-0.09%
Revenue NQ rev (1m)1.25%
Revenue NQ rev (3m)1.45%
Revenue NY rev (1m)0.56%
Revenue NY rev (3m)0.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.51 | ||
| Fwd PE | 7.87 | ||
| P/S | 0.46 | ||
| P/FCF | 8.76 | ||
| P/OCF | 6.74 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.86 |
EPS(TTM)3.13
EY11.75%
EPS(NY)3.39
Fwd EY12.71%
FCF(TTM)3.04
FCFY11.42%
OCF(TTM)3.95
OCFY14.84%
SpS58.53
BVpS-0.96
TBVpS-10.29
PEG (NY)N/A
PEG (5Y)0.97
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%
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 Turnover1.37
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
WACC7.42%
ROIC/WACC3.49
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-7.27%
EPS Next 2Y-0.05%
EPS Next 3Y1.69%
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 Year2.88%
Revenue Next 2Y2.21%
Revenue Next 3Y2.02%
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%