HP INC (HPQ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HPQ - US40434L1052 - Common Stock
19.05 USD
-0.32 (-1.65%)
19.1 USD
+0.05 (+0.26%)
HPQ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 35 industry peers in the Technology Hardware, Storage & Peripherals industry. HPQ has a medium profitability rating, but doesn't score so well on its financial health evaluation. HPQ has a bad growth rate and is valued cheaply. 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.
- In the past 5 years HPQ has always been profitable.
- Each year in the past 5 years HPQ had a positive operating cash flow.
1.2 Ratios
- HPQ has a better Return On Assets (6.05%) than 80.00% of its industry peers.
- With an excellent Return On Invested Capital value of 25.99%, HPQ belongs to the best of the industry, outperforming 94.29% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for HPQ is significantly above the industry average of 16.06%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.05% | ||
| ROE | N/A | ||
| ROIC | 25.99% |
ROA(3y)7.28%
ROA(5y)9.38%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)29.86%
ROIC(5y)35.59%
1.3 Margins
- HPQ has a better Profit Margin (4.57%) than 80.00% of its industry peers.
- In the last couple of years the Profit Margin of HPQ has declined.
- With a decent Operating Margin value of 6.55%, HPQ is doing good in the industry, outperforming 74.29% of the companies in the same industry.
- In the last couple of years the Operating Margin of HPQ has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 20.60%, HPQ is doing worse than 68.57% of the companies in the same industry.
- In the last couple of years the Gross Margin of HPQ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.55% | ||
| PM (TTM) | 4.57% | ||
| GM | 20.6% |
OM growth 3Y-6.95%
OM growth 5Y-1.18%
PM growth 3Y-2.79%
PM growth 5Y-1.85%
GM growth 3Y1.86%
GM growth 5Y2.26%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HPQ is creating value.
- 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
- The Debt to FCF ratio of HPQ is 3.45, which is a good value as it means it would take HPQ, 3.45 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of HPQ (3.45) is better than 68.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.45 | ||
| Altman-Z | N/A |
ROIC/WACC3.55
WACC7.33%
2.3 Liquidity
- A Current Ratio of 0.77 indicates that HPQ may have some problems paying its short term obligations.
- HPQ has a Current ratio of 0.77. This is amonst the worse of the industry: HPQ underperforms 80.00% of its industry peers.
- A Quick Ratio of 0.48 indicates that HPQ may have some problems paying its short term obligations.
- With a Quick ratio value of 0.48, HPQ is not doing good in the industry: 77.14% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
- The earnings per share for HPQ have decreased by -7.67% in the last year.
- HPQ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.64% yearly.
- The Revenue has been growing slightly by 3.24% in the past year.
- The Revenue has been decreasing by -0.48% on average over the past years.
EPS 1Y (TTM)-7.67%
EPS 3Y-8.38%
EPS 5Y6.64%
EPS Q2Q%0%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y-4.21%
Revenue growth 5Y-0.48%
Sales Q2Q%4.16%
3.2 Future
- The Earnings Per Share is expected to grow by 2.75% 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 0.50% yearly.
EPS Next Y-1.08%
EPS Next 2Y1.46%
EPS Next 3Y3.48%
EPS Next 5Y2.75%
Revenue Next Year1.51%
Revenue Next 2Y1.35%
Revenue Next 3Y1.25%
Revenue Next 5Y0.5%
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
- HPQ is valuated cheaply with a Price/Earnings ratio of 6.09.
- Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of HPQ to the average of the S&P500 Index (28.60), we can say HPQ is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 6.15, the valuation of HPQ can be described as very cheap.
- Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 94.29% of the companies in the same industry.
- HPQ's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.09 | ||
| Fwd PE | 6.15 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaper than 100.00% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, HPQ is valued cheaper than 91.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.36 | ||
| EV/EBITDA | 5.24 |
4.3 Compensation for Growth
- The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.92
EPS Next 2Y1.46%
EPS Next 3Y3.48%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 6.05%, HPQ is a good candidate for dividend investing.
- In the last 3 months the price of HPQ has falen by -31.15%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.65, 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 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
5.2 History
- On average, the dividend of HPQ grows each year by 9.97%, which is quite nice.
- 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)9.97%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
- 43.02% 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.
DP43.02%
EPS Next 2Y1.46%
EPS Next 3Y3.48%
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 for HPQ stock?
ChartMill assigns a valuation rating of 8 / 10 to HP INC (HPQ). This can be considered as Undervalued.
How profitable is HP INC (HPQ) stock?
HP INC (HPQ) has a profitability rating of 6 / 10.
Can you provide the financial health for HPQ stock?
The financial health rating of HP INC (HPQ) is 3 / 10.
What is the earnings growth outlook for HP INC?
The Earnings per Share (EPS) of HP INC (HPQ) is expected to decline by -1.08% in the next year.