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 has a great profitability rating, there are quite some concerns on its financial health. HPQ has a bad growth rate and is valued cheaply. 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.
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
HPQ has a Return On Assets of 6.49%. This is amongst the best in the industry. HPQ outperforms 81.25% of its industry peers.
HPQ has a better Return On Invested Capital (26.59%) than 93.75% of its industry peers.
HPQ had an Average Return On Invested Capital over the past 3 years of 31.68%. This 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
With a decent Profit Margin value of 4.64%, HPQ is doing good in the industry, outperforming 75.00% of the companies in the same industry.
HPQ's Profit Margin has been stable in the last couple of years.
HPQ's Operating Margin of 7.08% is fine compared to the rest of the industry. HPQ outperforms 62.50% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
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
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 reduced 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 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/WACC2.79
WACC9.52%
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.
Looking at the Current ratio, with a value of 0.73, HPQ is doing worse than 90.63% of the companies in the same industry.
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
HPQ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.31%.
Measured over the past years, HPQ shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.74% on average per year.
Looking at the last year, HPQ shows a small growth in Revenue. The Revenue has grown by 2.45% in the last 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
The Earnings Per Share is expected to grow by 2.51% on average over the next years.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
HPQ is valuated reasonably with a Price/Earnings ratio of 8.10.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 93.75% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.45. HPQ is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 7.65, the valuation of HPQ can be described as very cheap.
84.38% of the companies in the same industry are more expensive than HPQ, based on the Price/Forward Earnings ratio.
HPQ is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.1 | ||
| Fwd PE | 7.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 93.75% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 96.88% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.22 | ||
| EV/EBITDA | 6.97 |
4.3 Compensation for Growth
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.93
EPS Next 2Y0.15%
EPS Next 3Y2.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.68%, HPQ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.99, HPQ pays a better dividend. On top of this HPQ pays more dividend than 100.00% of the companies listed in the same industry.
HPQ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
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 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%
26
+0.15 (+0.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.45%
Inst Owner Change-0.57%
Ins Owners0.2%
Ins Owner Change-1.02%
Market Cap24.51B
Analysts67
Price Target27.57 (6.04%)
Short Float %3.14%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
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)-17.97%
PT rev (3m)-25.78%
EPS NQ rev (1m)-15.99%
EPS NQ rev (3m)-20.37%
EPS NY rev (1m)-10.07%
EPS NY rev (3m)-12.81%
Revenue NQ rev (1m)-1.43%
Revenue NQ rev (3m)-2.58%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)-0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.1 | ||
| Fwd PE | 7.65 | ||
| P/S | 0.45 | ||
| P/FCF | 9.22 | ||
| P/OCF | 7.09 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.97 |
EPS(TTM)3.21
EY12.35%
EPS(NY)3.4
Fwd EY13.08%
FCF(TTM)2.82
FCFY10.85%
OCF(TTM)3.67
OCFY14.11%
SpS57.6
BVpS-1.35
TBVpS-10.6
PEG (NY)N/A
PEG (5Y)0.93
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
WACC9.52%
ROIC/WACC2.79
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%