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. HPQ has an excellent profitability rating, but 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
In the past year HPQ was profitable.
HPQ had a positive operating cash flow in the past year.
Each year in the past 5 years HPQ has 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 9.48%, HPQ belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
HPQ has a Return On Invested Capital of 25.37%. This is amongst the best in the industry. HPQ outperforms 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 14.47%.
The last Return On Invested Capital (25.37%) for HPQ is well below the 3 year average (31.74%), which needs to be investigated, but indicates that HPQ had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | N/A | ||
| ROIC | 25.37% |
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
The Profit Margin of HPQ (6.40%) is better than 75.00% 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 8.02%, 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.
The Gross Margin of HPQ (21.83%) is worse than 68.75% of its industry peers.
In the last couple of years the Gross Margin of HPQ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.02% | ||
| PM (TTM) | 6.4% | ||
| GM | 21.83% |
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.
HPQ has less shares outstanding than it did 5 years ago.
HPQ has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.97 indicates that HPQ is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.97, HPQ perfoms like the industry average, outperforming 56.25% of the companies in the same industry.
HPQ has a debt to FCF ratio of 3.08. This is a good value and a sign of high solvency as HPQ would need 3.08 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.08, HPQ is doing good in the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.08 | ||
| Altman-Z | 1.97 |
ROIC/WACC2.76
WACC9.2%
2.3 Liquidity
A Current Ratio of 0.71 indicates that HPQ may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.71, HPQ is doing worse than 96.88% of the companies in the same industry.
A Quick Ratio of 0.42 indicates that HPQ may have some problems paying its short term obligations.
HPQ's Quick ratio of 0.42 is on the low side compared to the rest of the industry. HPQ is outperformed by 96.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| 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 -9.41%.
Measured over the past years, HPQ shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.38% on average per year.
The Revenue for HPQ has decreased by -11.04% in the past year. This is quite bad
HPQ shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.68% yearly.
EPS 1Y (TTM)-9.41%
EPS 3Y13.4%
EPS 5Y10.38%
EPS growth Q2Q8%
Revenue 1Y (TTM)-11.04%
Revenue growth 3Y-1.75%
Revenue growth 5Y-1.68%
Revenue growth Q2Q-4.65%
3.2 Future
The Earnings Per Share is expected to grow by 2.68% on average over the next years.
Based on estimates for the next years, HPQ will show a small growth in Revenue. The Revenue will grow by 2.10% on average per year.
EPS Next Y4.6%
EPS Next 2Y5.3%
EPS Next 3Y4.51%
EPS Next 5Y2.68%
Revenue Next Year-0.23%
Revenue Next 2Y1.54%
Revenue Next 3Y1.88%
Revenue Next 5Y2.1%
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
Based on the Price/Earnings ratio of 8.31, the valuation of HPQ can be described as reasonable.
HPQ's Price/Earnings ratio is rather cheap when compared to the industry. HPQ is cheaper than 84.38% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.92, HPQ is valued rather cheaply.
HPQ is valuated cheaply with a Price/Forward Earnings ratio of 7.63.
87.50% of the companies in the same industry are more expensive than HPQ, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.49, HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.31 | ||
| Fwd PE | 7.63 |
4.2 Price Multiples
HPQ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. HPQ is cheaper than 75.00% 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 84.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.76 | ||
| EV/EBITDA | 6.77 |
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)1.81
PEG (5Y)0.8
EPS Next 2Y5.3%
EPS Next 3Y4.51%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 3.92%. 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 2.77. HPQ pays more dividend than 96.88% of the companies in the same industry.
HPQ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
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 Years19
5.3 Sustainability
HPQ pays out 30.99% of its income as dividend. This is a sustainable payout ratio.
The dividend of HPQ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP30.99%
EPS Next 2Y5.3%
EPS Next 3Y4.51%
HP INC
NYSE:HPQ (4/26/2024, 7:04:00 PM)
After market: 28 0 (0%)28
-0.13 (-0.46%)
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 Cap27.46B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.31 | ||
| Fwd PE | 7.63 | ||
| 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)1.81
PEG (5Y)0.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.02% | ||
| PM (TTM) | 6.4% | ||
| GM | 21.83% | ||
| 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 Turnover1.48
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 | 0.42 | ||
| 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)
Growth
EPS 1Y (TTM)-9.41%
EPS 3Y13.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-11.04%
Revenue growth 3Y-1.75%
Revenue growth 5Y
Revenue growth 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