HP INC (HPQ)
US40434L1052 - Common Stock
HPQ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ has a great profitability rating, there are some minor 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.
In the past 5 years HPQ has always been profitable.
HPQ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.48%, HPQ belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 25.37%, HPQ belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
HPQ had an Average Return On Invested Capital over the past 3 years of 31.74%. This is significantly above the industry average of 14.47%.
The 3 year average ROIC (31.74%) for HPQ is well above the current ROIC(25.37%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | N/A | ||
| ROIC | 25.37% |
ROA(3y)11.27%
ROA(5y)10.28%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.74%
ROIC(5y)33.13%
1.3 Margins
Looking at the Profit Margin, with a value of 6.40%, HPQ is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Profit Margin of HPQ has declined.
The Operating Margin of HPQ (8.02%) is better than 71.88% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
HPQ has a Gross Margin of 21.83%. This is in the lower half of the industry: HPQ underperforms 68.75% of its industry peers.
HPQ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.02% | ||
| PM (TTM) | 6.4% | ||
| GM | 21.83% |
OM growth 3Y4.16%
OM growth 5Y2.38%
PM growth 3Y6.55%
PM growth 5Y-7.79%
GM growth 3Y5.15%
GM growth 5Y3.26%
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 increased 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
An Altman-Z score of 1.97 indicates that HPQ is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.97, HPQ is in line with its industry, outperforming 56.25% of the companies in the same industry.
The Debt to FCF ratio of HPQ is 3.08, which is a good value as it means it would take HPQ, 3.08 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.08, HPQ is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.08 | ||
| Altman-Z | 1.97 |
ROIC/WACC2.77
WACC9.15%
2.3 Liquidity
HPQ has a Current Ratio of 0.71. 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's Current ratio of 0.71 is on the low side compared to the rest of the industry. HPQ is outperformed by 96.88% of its industry peers.
A Quick Ratio of 0.42 indicates that HPQ may have some problems paying its short term obligations.
With a Quick ratio value of 0.42, HPQ is not doing good in the industry: 96.88% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.42 |
3. Growth
3.1 Past
The earnings per share for HPQ have decreased by -9.41% in the last year.
HPQ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.38% yearly.
Looking at the last year, HPQ shows a very negative growth in Revenue. The Revenue has decreased by -11.04% in the last year.
HPQ shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.68% yearly.
EPS 1Y (TTM)-9.41%
EPS 3Y13.4%
EPS 5Y10.38%
EPS growth Q2Q8%
Revenue 1Y (TTM)-11.04%
Revenue growth 3Y-1.75%
Revenue growth 5Y-1.68%
Revenue growth Q2Q-4.65%
3.2 Future
The Earnings Per Share is expected to grow by 2.68% on average over the next years.
The Revenue is expected to grow by 2.10% on average over the next years.
EPS Next Y4.6%
EPS Next 2Y5.3%
EPS Next 3Y4.51%
EPS Next 5Y2.68%
Revenue Next Year-0.23%
Revenue Next 2Y1.54%
Revenue Next 3Y1.88%
Revenue Next 5Y2.1%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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 8.35 indicates a reasonable valuation of HPQ.
Based on the Price/Earnings ratio, HPQ is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.20, HPQ is valued rather cheaply.
A Price/Forward Earnings ratio of 7.66 indicates a rather cheap valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 87.50% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HPQ to the average of the S&P500 Index (21.63), we can say HPQ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.35 | ||
| Fwd PE | 7.66 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than HPQ, based on the Enterprise Value to EBITDA ratio.
HPQ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HPQ is cheaper than 84.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.81 | ||
| EV/EBITDA | 6.79 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)0.8
EPS Next 2Y5.3%
EPS Next 3Y4.51%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.99%, HPQ has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.75, HPQ pays a better dividend. On top of this HPQ pays more dividend than 96.88% 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 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.99% |
5.2 History
On average, the dividend of HPQ grows each year by 13.46%, 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)13.46%
Div Incr Years13
Div Non Decr Years19
5.3 Sustainability
30.99% of the earnings are spent on dividend by HPQ. This is a low number and sustainable payout ratio.
The dividend of HPQ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP30.99%
EPS Next 2Y5.3%
EPS Next 3Y4.51%
HP INC
NYSE:HPQ (4/25/2024, 7:04:00 PM)
After market: 28.13 0 (0%)28.13
+0.03 (+0.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap27.59B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.99% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.35 | ||
| Fwd PE | 7.66 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.81
PEG (5Y)0.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.02% | ||
| PM (TTM) | 6.4% | ||
| GM | 21.83% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.42 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-9.41%
EPS 3Y13.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-11.04%
Revenue growth 3Y-1.75%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y