HP INC (HPQ) Stock Fundamental Analysis
USA - NYSE:HPQ - US40434L1052 - Common Stock
26.28 USD
+0.11 (+0.42%)
26.34 USD
+0.06 (+0.23%)
Overall HPQ gets a fundamental rating of 5 out of 10. We evaluated HPQ against 35 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 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.
HPQ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.62%, HPQ is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
HPQ has a Return On Invested Capital of 25.92%. This is amongst the best in the industry. HPQ outperforms 94.29% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HPQ is significantly above the industry average of 16.54%.
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
Looking at the Profit Margin, with a value of 4.83%, HPQ is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
HPQ's Operating Margin of 6.71% is fine compared to the rest of the industry. HPQ outperforms 65.71% of its industry peers.
HPQ's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 20.89%, HPQ is doing worse than 65.71% of the companies in the same industry.
HPQ's Gross Margin has improved in the last couple of years.
| 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
HPQ has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HPQ has less shares outstanding
HPQ has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HPQ has been reduced compared to a year ago.
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.
Looking at the Debt to FCF ratio, with a value of 3.38, HPQ is in the better half of the industry, outperforming 71.43% 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
WACC7.39%
2.3 Liquidity
HPQ has a Current 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 Current ratio of 0.74. This is amonst the worse of the industry: HPQ underperforms 88.57% of its industry peers.
A Quick Ratio of 0.44 indicates that HPQ may have some problems paying its short term obligations.
With a Quick ratio value of 0.44, HPQ is not doing good in the industry: 88.57% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The earnings per share for HPQ have decreased by -6.85% in the last year.
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.
The Revenue has been growing slightly by 2.61% in the past year.
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
The Earnings Per Share is expected to grow by 2.13% 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 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.
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
A Price/Earnings ratio of 8.40 indicates a reasonable valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 97.14% of the companies are valued more expensively.
HPQ is valuated cheaply when we compare the Price/Earnings ratio to 25.83, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 7.72, which indicates a rather cheap valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 91.43% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HPQ to the average of the S&P500 Index (32.68), we can say HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.4 | ||
| Fwd PE | 7.72 |
4.2 Price Multiples
97.14% of the companies in the same industry are more expensive than HPQ, based on the Enterprise Value to EBITDA ratio.
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 | 8.64 | ||
| EV/EBITDA | 6.8 |
4.3 Compensation for Growth
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y0.18%
EPS Next 3Y1.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.21%, HPQ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.85, HPQ pays a better dividend. On top of this HPQ pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, HPQ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 11.65%!
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.
The dividend of HPQ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.95%
EPS Next 2Y0.18%
EPS Next 3Y1.91%
26.28
+0.11 (+0.42%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.79%
Inst Owner Change-0.16%
Ins Owners0.21%
Ins Owner Change2.89%
Market Cap24.56B
Revenue(TTM)54.71B
Net Income(TTM)2.64B
Analysts66.36
Price Target28.72 (9.28%)
Short Float %5.33%
Short Ratio4.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
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)1.24%
PT rev (3m)4.19%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)0.54%
EPS NY rev (1m)0.07%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0.41%
Revenue NQ rev (3m)1.86%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.4 | ||
| Fwd PE | 7.72 | ||
| P/S | 0.45 | ||
| P/FCF | 8.64 | ||
| P/OCF | 6.65 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.8 |
EPS(TTM)3.13
EY11.91%
EPS(NY)3.4
Fwd EY12.95%
FCF(TTM)3.04
FCFY11.57%
OCF(TTM)3.95
OCFY15.05%
SpS58.53
BVpS-0.96
TBVpS-10.29
PEG (NY)N/A
PEG (5Y)0.96
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
WACC7.39%
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 8 / 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 8.4 and the Price/Book (PB) ratio is -27.26.
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%.