HP INC (HPQ) Stock Fundamental Analysis
NYSE:HPQ - New York Stock Exchange, Inc. - US40434L1052 - Common Stock - Currency: USD
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 belongs to the best of the industry regarding profitability, there are concerns on its financial health. HPQ is valued quite cheap, but it does not seem to be growing. Finally HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year HPQ was profitable.
In the past year HPQ had a positive cash flow from operations.
HPQ had positive earnings in each of the past 5 years.
HPQ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HPQ (6.49%) is better than 81.25% of its industry peers.
HPQ has a Return On Invested Capital of 26.59%. This is amongst the best in 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 16.42%.
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.
HPQ's Profit Margin has been stable in the last couple of years.
The Operating Margin of HPQ (7.08%) is better than 62.50% of its industry peers.
HPQ's Operating Margin has improved in the last couple of years.
The Gross Margin of HPQ (21.15%) is worse than 68.75% of its industry peers.
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
The number of shares outstanding for HPQ has been reduced compared to 5 years ago.
HPQ has a better debt/assets ratio than last year.
2.2 Solvency
HPQ has a debt to FCF ratio of 4.04. This is a neutral value as HPQ would need 4.04 years to pay back of all of its debts.
HPQ's Debt to FCF ratio of 4.04 is fine compared to the rest of the industry. HPQ outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.04 | ||
| Altman-Z | N/A |
ROIC/WACC3.48
WACC7.64%
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's Current ratio of 0.73 is on the low side compared to the rest of the industry. HPQ is outperformed by 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.
HPQ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.74% yearly.
The Revenue has been growing slightly by 2.45% in the past year.
The Revenue has been decreasing by -1.84% on average over the past years.
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.
The Revenue is expected to grow by 1.01% on average over the next years.
EPS Next Y3.21%
EPS Next 2Y3.55%
EPS Next 3Y4.63%
EPS Next 5Y2.51%
Revenue Next Year2.28%
Revenue Next 2Y1.95%
Revenue Next 3Y1.9%
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 7.96 indicates a rather cheap valuation of HPQ.
93.75% of the companies in the same industry are more expensive than HPQ, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.53. HPQ is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.03, which indicates a rather cheap valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
HPQ's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.96 | ||
| Fwd PE | 7.03 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaper than 90.63% of the companies in the same industry.
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 | 9.06 | ||
| EV/EBITDA | 6.79 |
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.
HPQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.48
PEG (5Y)0.91
EPS Next 2Y3.55%
EPS Next 3Y4.63%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.69%, which is a nice return.
Compared to an average industry Dividend Yield of 2.04, 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 2.39, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.69% |
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
42.79% of the earnings are spent on dividend by HPQ. This is a bit on the high side, but may be sustainable.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP42.79%
EPS Next 2Y3.55%
EPS Next 3Y4.63%
25.56
+0.44 (+1.75%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.73%
Inst Owner Change-0.57%
Ins Owners0.1%
Ins Owner Change-4.26%
Market Cap24.10B
Analysts67
Price Target28.51 (11.54%)
Short Float %3.68%
Short Ratio3.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.69% |
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)-16.72%
PT rev (3m)-24.15%
EPS NQ rev (1m)-15.99%
EPS NQ rev (3m)-20.55%
EPS NY rev (1m)-0.3%
EPS NY rev (3m)-3.27%
Revenue NQ rev (1m)-1.43%
Revenue NQ rev (3m)-1.63%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.96 | ||
| Fwd PE | 7.03 | ||
| P/S | 0.44 | ||
| P/FCF | 9.06 | ||
| P/OCF | 6.97 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.79 |
EPS(TTM)3.21
EY12.56%
EPS(NY)3.64
Fwd EY14.22%
FCF(TTM)2.82
FCFY11.04%
OCF(TTM)3.67
OCFY14.36%
SpS57.6
BVpS-1.35
TBVpS-10.6
PEG (NY)2.48
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
WACC7.64%
ROIC/WACC3.48
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 Y3.21%
EPS Next 2Y3.55%
EPS Next 3Y4.63%
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 Year2.28%
Revenue Next 2Y1.95%
Revenue Next 3Y1.9%
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%