HP INC (HPQ) Stock Fundamental Analysis
NYSE:HPQ - US40434L1052 - Common Stock
27.74 USD
+1.16 (+4.36%)
27.74 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to HPQ. HPQ was compared to 32 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 valued quite cheap, but it does not seem to be growing. HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HPQ had positive earnings in the past year.
In the past year HPQ had a positive cash flow from operations.
HPQ had positive earnings in each of the past 5 years.
In the past 5 years HPQ always reported a positive cash flow from operatings.
1.2 Ratios
HPQ has a Return On Assets of 6.49%. This is in the better half of the industry: HPQ outperforms 78.13% of its industry peers.
HPQ has a better Return On Invested Capital (26.59%) than 93.75% of its industry peers.
HPQ had an Average Return On Invested Capital over the past 3 years of 31.68%. This is significantly above the industry average of 15.13%.
The last Return On Invested Capital (26.59%) for HPQ is well below the 3 year average (31.68%), which needs to be investigated, but indicates that HPQ had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | N/A | ||
| ROIC | 26.59% |
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
The Profit Margin of HPQ (4.64%) is better than 71.88% of its industry peers.
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 7.08% is fine compared to the rest of the industry. HPQ outperforms 62.50% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
With a Gross Margin value of 21.15%, HPQ is not doing good in the industry: 68.75% of the companies in the same industry are doing better.
HPQ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.08% | ||
| PM (TTM) | 4.64% | ||
| GM | 21.15% |
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.
The number of shares outstanding for HPQ has been reduced compared to 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 4.04, which is a neutral value as it means it would take HPQ, 4.04 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.04, HPQ is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.04 | ||
| Altman-Z | N/A |
ROIC/WACC3.52
WACC7.56%
2.3 Liquidity
HPQ has a Current Ratio of 0.73. This is a bad value and indicates that HPQ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.73, HPQ is doing worse than 90.63% of the companies in the same industry.
HPQ has a Quick Ratio of 0.73. 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 Quick ratio of 0.42. This is amonst the worse of the industry: HPQ underperforms 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| 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 -5.31%.
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.
Looking at the last year, HPQ shows a small growth in Revenue. The Revenue has grown by 2.45% in the last year.
HPQ shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.84% yearly.
EPS 1Y (TTM)-5.31%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-13.41%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.28%
3.2 Future
The Earnings Per Share is expected to grow by 2.51% on average over the next years.
The Revenue is expected to grow by 1.26% on average over the next years.
EPS Next Y-7.19%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
EPS Next 5Y2.51%
Revenue Next Year2.25%
Revenue Next 2Y1.89%
Revenue Next 3Y1.86%
Revenue Next 5Y1.26%
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 8.64 indicates a reasonable valuation of HPQ.
96.88% of the companies in the same industry are more expensive than HPQ, based on the Price/Earnings ratio.
HPQ's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.24.
The Price/Forward Earnings ratio is 8.16, which indicates a very decent valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
HPQ's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.64 | ||
| Fwd PE | 8.16 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 96.88% of the companies listed 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 90.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.8 | ||
| EV/EBITDA | 7.07 |
4.3 Compensation for Growth
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.99
EPS Next 2Y0.15%
EPS Next 3Y2.12%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 4.36%, which is a nice return.
Compared to an average industry Dividend Yield of 1.91, 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.36% |
5.2 History
On average, the dividend of HPQ grows each year by 11.65%, 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)11.65%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
42.79% 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.
DP42.79%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
27.74
+1.16 (+4.36%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners82.52%
Inst Owner Change-0.49%
Ins Owners0.2%
Ins Owner Change1.36%
Market Cap26.06B
Analysts66.67
Price Target27.53 (-0.76%)
Short Float %2.89%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.36% |
Yearly Dividend1.12
Dividend Growth(5Y)11.65%
DP42.79%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.03%
Min EPS beat(2)-12.57%
Max EPS beat(2)-1.5%
EPS beat(4)0
Avg EPS beat(4)-4.86%
Min EPS beat(4)-12.57%
Max EPS beat(4)-0.96%
EPS beat(8)1
Avg EPS beat(8)-2.77%
EPS beat(12)3
Avg EPS beat(12)-1.65%
EPS beat(16)7
Avg EPS beat(16)-0.2%
Revenue beat(2)1
Avg Revenue beat(2)-0.18%
Min Revenue beat(2)-0.41%
Max Revenue beat(2)0.04%
Revenue beat(4)2
Avg Revenue beat(4)-0.2%
Min Revenue beat(4)-0.5%
Max Revenue beat(4)0.07%
Revenue beat(8)3
Avg Revenue beat(8)-0.92%
Revenue beat(12)3
Avg Revenue beat(12)-1.79%
Revenue beat(16)6
Avg Revenue beat(16)-1.03%
PT rev (1m)-0.13%
PT rev (3m)-18.08%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)-15.89%
EPS NY rev (1m)0%
EPS NY rev (3m)-10.07%
Revenue NQ rev (1m)0.24%
Revenue NQ rev (3m)-1.19%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.64 | ||
| Fwd PE | 8.16 | ||
| P/S | 0.48 | ||
| P/FCF | 9.8 | ||
| P/OCF | 7.53 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.07 |
EPS(TTM)3.21
EY11.57%
EPS(NY)3.4
Fwd EY12.26%
FCF(TTM)2.83
FCFY10.21%
OCF(TTM)3.68
OCFY13.28%
SpS57.81
BVpS-1.36
TBVpS-10.63
PEG (NY)N/A
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | N/A | ||
| ROCE | 31.41% | ||
| ROIC | 26.59% | ||
| ROICexc | 34.21% | ||
| ROICexgc | 406.86% | ||
| OM | 7.08% | ||
| PM (TTM) | 4.64% | ||
| GM | 21.15% | ||
| FCFM | 4.9% |
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%
ROICexcg growth 3YN/A
ROICexcg 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 Turnover1.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.04 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 97.8% | ||
| Cap/Sales | 1.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.16% | ||
| Profit Quality | 105.64% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.42 | ||
| Altman-Z | N/A |
F-Score5
WACC7.56%
ROIC/WACC3.52
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)-5.31%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%-13.41%
EPS Next Y-7.19%
EPS Next 2Y0.15%
EPS Next 3Y2.12%
EPS Next 5Y2.51%
Revenue 1Y (TTM)2.45%
Revenue growth 3Y-5.5%
Revenue growth 5Y-1.84%
Sales Q2Q%3.28%
Revenue Next Year2.25%
Revenue Next 2Y1.89%
Revenue Next 3Y1.86%
Revenue Next 5Y1.26%
EBIT growth 1Y-10.66%
EBIT growth 3Y-9.55%
EBIT growth 5Y0.07%
EBIT Next Year9.32%
EBIT Next 3Y3.63%
EBIT Next 5Y0.31%
FCF growth 1Y17.81%
FCF growth 3Y-18.48%
FCF growth 5Y-4.54%
OCF growth 1Y18.54%
OCF growth 3Y-16.37%
OCF growth 5Y-4.23%