HP INC (HPQ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HPQ - US40434L1052 - Common Stock
24.42 USD
+0.44 (+1.83%)
24.39 USD
-0.03 (-0.12%)
Taking everything into account, HPQ scores 5 out of 10 in our fundamental rating. HPQ was compared to 35 industry peers in the Technology Hardware, Storage & Peripherals industry. There are concerns on the financial health of HPQ while its profitability can be described as average. HPQ is cheap, but on the other hand it scores bad on growth. 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.
HPQ had positive earnings in each of the past 5 years.
Each year in the past 5 years HPQ had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 6.05%, HPQ is doing good in the industry, outperforming 80.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 25.99%, HPQ belongs to the top 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 15.28%.
| 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 74.29% of its industry peers.
HPQ's Profit Margin has declined in the last couple of years.
HPQ has a Operating Margin of 6.55%. This is in the better half of the industry: HPQ outperforms 71.43% of its industry peers.
HPQ's Operating Margin has been stable in the last couple of years.
The Gross Margin of HPQ (20.60%) is worse than 68.57% of its industry peers.
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
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
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 3.45. This is a good value and a sign of high solvency as HPQ would need 3.45 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.45, HPQ is doing good in the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.45 | ||
| Altman-Z | N/A |
ROIC/WACC3.6
WACC7.22%
2.3 Liquidity
A Current Ratio of 0.77 indicates that HPQ may have some problems paying its short term obligations.
The Current ratio of HPQ (0.77) is worse than 88.57% of its industry peers.
HPQ has a Quick Ratio of 0.77. 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 (0.48) than 85.71% of its industry peers.
| 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.
The Earnings Per Share has been growing slightly by 6.64% on average over the past years.
Looking at the last year, HPQ shows a small growth in Revenue. The Revenue has grown by 3.24% in the last 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
HPQ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.74% yearly.
Based on estimates for the next years, HPQ will show a small growth in Revenue. The Revenue will grow by 1.27% on average per year.
EPS Next Y8.59%
EPS Next 2Y7.07%
EPS Next 3Y4.93%
EPS Next 5Y4.74%
Revenue Next Year1.62%
Revenue Next 2Y1.66%
Revenue Next 3Y1.37%
Revenue Next 5Y1.27%
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
With a Price/Earnings ratio of 7.80, the valuation of HPQ can be described as very cheap.
94.29% of the companies in the same industry are more expensive than HPQ, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.15, HPQ is valued rather cheaply.
HPQ is valuated cheaply with a Price/Forward Earnings ratio of 7.18.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 85.71% of the companies listed 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 36.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.8 | ||
| Fwd PE | 7.18 |
4.2 Price Multiples
HPQ's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPQ is cheaper than 97.14% of the companies 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 85.71% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.15 | ||
| EV/EBITDA | 6.25 |
4.3 Compensation for Growth
HPQ's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HPQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.91
PEG (5Y)1.18
EPS Next 2Y7.07%
EPS Next 3Y4.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.83%, HPQ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.07, 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 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.83% |
5.2 History
On average, the dividend of HPQ grows each year by 9.97%, 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)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 2Y7.07%
EPS Next 3Y4.93%
24.42
+0.44 (+1.83%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.79%
Inst Owner Change1.77%
Ins Owners0.21%
Ins Owner Change5.78%
Market Cap22.83B
Revenue(TTM)55.30B
Net Income(TTM)2.53B
Analysts65.45
Price Target28.67 (17.4%)
Short Float %6.17%
Short Ratio5.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.83% |
Yearly Dividend1.16
Dividend Growth(5Y)9.97%
DP43.02%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.64%
Min EPS beat(2)-1.12%
Max EPS beat(2)-0.16%
EPS beat(4)0
Avg EPS beat(4)-3.83%
Min EPS beat(4)-12.57%
Max EPS beat(4)-0.16%
EPS beat(8)1
Avg EPS beat(8)-2.72%
EPS beat(12)2
Avg EPS beat(12)-1.72%
EPS beat(16)5
Avg EPS beat(16)-0.81%
Revenue beat(2)2
Avg Revenue beat(2)0.4%
Min Revenue beat(2)0.08%
Max Revenue beat(2)0.72%
Revenue beat(4)3
Avg Revenue beat(4)0.11%
Min Revenue beat(4)-0.41%
Max Revenue beat(4)0.72%
Revenue beat(8)5
Avg Revenue beat(8)-0.4%
Revenue beat(12)5
Avg Revenue beat(12)-1.01%
Revenue beat(16)7
Avg Revenue beat(16)-1.11%
PT rev (1m)0.28%
PT rev (3m)4.15%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)0.54%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-0.73%
Revenue NQ rev (1m)0.41%
Revenue NQ rev (3m)1.85%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.8 | ||
| Fwd PE | 7.18 | ||
| P/S | 0.41 | ||
| P/FCF | 8.15 | ||
| P/OCF | 6.17 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.25 |
EPS(TTM)3.13
EY12.82%
EPS(NY)3.4
Fwd EY13.92%
FCF(TTM)3
FCFY12.27%
OCF(TTM)3.96
OCFY16.2%
SpS59.16
BVpS-0.37
TBVpS-9.68
PEG (NY)0.91
PEG (5Y)1.18
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.05% | ||
| ROE | N/A | ||
| ROCE | 28.97% | ||
| ROIC | 25.99% | ||
| ROICexc | 36.92% | ||
| ROICexgc | 3251.08% | ||
| OM | 6.55% | ||
| PM (TTM) | 4.57% | ||
| GM | 20.6% | ||
| FCFM | 5.06% |
ROA(3y)7.28%
ROA(5y)9.38%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)29.86%
ROIC(5y)35.59%
ROICexc(3y)41.51%
ROICexc(5y)52.92%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)33.38%
ROCE(5y)40.28%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y-9.52%
ROICexc growth 5Y-18.88%
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%
F-Score5
Asset Turnover1.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.45 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 97.93% | ||
| Cap/Sales | 1.62% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.43% | ||
| Profit Quality | 110.72% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z | N/A |
F-Score5
WACC7.22%
ROIC/WACC3.6
Cap/Depr(3y)80.3%
Cap/Depr(5y)83.29%
Cap/Sales(3y)1.29%
Cap/Sales(5y)1.21%
Profit Quality(3y)105.09%
Profit Quality(5y)104.32%
High Growth Momentum
Growth
EPS 1Y (TTM)-7.67%
EPS 3Y-8.38%
EPS 5Y6.64%
EPS Q2Q%0%
EPS Next Y8.59%
EPS Next 2Y7.07%
EPS Next 3Y4.93%
EPS Next 5Y4.74%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y-4.21%
Revenue growth 5Y-0.48%
Sales Q2Q%4.16%
Revenue Next Year1.62%
Revenue Next 2Y1.66%
Revenue Next 3Y1.37%
Revenue Next 5Y1.27%
EBIT growth 1Y-13.76%
EBIT growth 3Y-10.87%
EBIT growth 5Y-1.66%
EBIT Next Year23.47%
EBIT Next 3Y3.64%
EBIT Next 5Y2.77%
FCF growth 1Y-11.31%
FCF growth 3Y-8.64%
FCF growth 5Y-5.6%
OCF growth 1Y-1.39%
OCF growth 3Y-6.08%
OCF growth 5Y-3.05%
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 9 / 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 6 / 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 7.8 and the Price/Book (PB) ratio is -65.97.
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 43.02%.