HP INC (HPQ) Stock Fundamental Analysis
USA - NYSE:HPQ - US40434L1052 - Common Stock
27.92 USD
+0.26 (+0.94%)
27.9859 USD
+0.07 (+0.24%)
We assign a fundamental rating of 5 out of 10 to HPQ. HPQ was compared to 34 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 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's Return On Assets of 6.62% is fine compared to the rest of the industry. HPQ outperforms 79.41% of its industry peers.
HPQ has a better Return On Invested Capital (25.92%) than 94.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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 has a Profit Margin of 4.83%. This is in the better half of the industry: HPQ outperforms 76.47% of its industry peers.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
The Operating Margin of HPQ (6.71%) is better than 64.71% of its industry peers.
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 67.65% of its industry peers.
In the last couple of years the Gross Margin of HPQ has grown nicely.
| 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
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
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
The Debt to FCF ratio of HPQ is 3.38, which is a good value as it means it would take HPQ, 3.38 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.38, HPQ is doing good in the industry, outperforming 73.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.38 | ||
| Altman-Z | N/A |
ROIC/WACC3.51
WACC7.38%
2.3 Liquidity
A Current Ratio of 0.74 indicates that HPQ may have some problems paying its short term obligations.
HPQ has a worse Current ratio (0.74) than 91.18% of its industry peers.
HPQ has a Quick 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 Quick ratio (0.44) than 91.18% 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%.
HPQ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.74% yearly.
HPQ shows a small growth in Revenue. In the last year, the Revenue has grown by 2.61%.
Measured over the past years, HPQ shows a decrease in Revenue. The Revenue has been decreasing by -1.84% on average per year.
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
HPQ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.13% yearly.
Based on estimates for the next years, HPQ will show a small growth in Revenue. The Revenue will grow by 1.32% on average per year.
EPS Next Y-7.21%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
EPS Next 5Y2.13%
Revenue Next Year2.98%
Revenue Next 2Y2.34%
Revenue Next 3Y2.14%
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
The Price/Earnings ratio is 8.92, which indicates a very decent valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 97.06% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.08. HPQ is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.21, the valuation of HPQ can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 88.24% 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 (23.09), we can say HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.92 | ||
| Fwd PE | 8.21 |
4.2 Price Multiples
HPQ's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPQ is cheaper than 94.12% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HPQ is valued cheaper than 85.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.18 | ||
| EV/EBITDA | 7.1 |
4.3 Compensation for Growth
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.02
EPS Next 2Y0.18%
EPS Next 3Y1.91%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.16%, which is a nice return.
HPQ's Dividend Yield is rather good when compared to the industry average which is at 1.86. HPQ pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.16% |
5.2 History
On average, the dividend of HPQ grows each year by 11.65%, which is quite nice.
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)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.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP40.95%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
27.92
+0.26 (+0.94%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.79%
Inst Owner Change0.18%
Ins Owners0.21%
Ins Owner Change2.89%
Market Cap26.10B
Revenue(TTM)54.71B
Net Income(TTM)2.64B
Analysts66.36
Price Target28.59 (2.4%)
Short Float %5.33%
Short Ratio4.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.16% |
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)0.79%
PT rev (3m)3.72%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)0.29%
EPS NY rev (1m)0.07%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)1.44%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.92 | ||
| Fwd PE | 8.21 | ||
| P/S | 0.48 | ||
| P/FCF | 9.18 | ||
| P/OCF | 7.06 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.1 |
EPS(TTM)3.13
EY11.21%
EPS(NY)3.4
Fwd EY12.19%
FCF(TTM)3.04
FCFY10.89%
OCF(TTM)3.95
OCFY14.16%
SpS58.53
BVpS-0.96
TBVpS-10.29
PEG (NY)N/A
PEG (5Y)1.02
Graham NumberN/A
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%
ROICexgc growth 3YN/A
ROICexgc 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
WACC7.38%
ROIC/WACC3.51
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-7.21%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
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 Year2.98%
Revenue Next 2Y2.34%
Revenue Next 3Y2.14%
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%
HP INC / HPQ FAQ
Can you provide the ChartMill fundamental rating for HP INC?
ChartMill assigns a fundamental rating of 5 / 10 to HPQ.
What is the valuation status of HP INC (HPQ) stock?
ChartMill assigns a valuation rating of 7 / 10 to HP INC (HPQ). This can be considered as Undervalued.
Can you provide the profitability details for HP INC?
HP INC (HPQ) has a profitability rating of 7 / 10.
What is the valuation of HP INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HP INC (HPQ) is 8.92 and the Price/Book (PB) ratio is -28.96.
Can you provide the dividend sustainability for HPQ stock?
The dividend rating of HP INC (HPQ) is 8 / 10 and the dividend payout ratio is 40.95%.