Critical Survey: Hewlett Packard Enterprise (HPE) and EMC (EMC)
Hewlett Packard Enterprise (NYSE: HPE) and EMC (NYSE:EMC) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
This is a summary of current recommendations and price targets for Hewlett Packard Enterprise and EMC, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hewlett Packard Enterprise||2||16||11||0||2.31|
Hewlett Packard Enterprise presently has a consensus price target of $18.00, suggesting a potential upside of 26.23%. Given Hewlett Packard Enterprise’s higher possible upside, analysts clearly believe Hewlett Packard Enterprise is more favorable than EMC.
Institutional and Insider Ownership
81.3% of Hewlett Packard Enterprise shares are held by institutional investors. Comparatively, 79.9% of EMC shares are held by institutional investors. 0.9% of Hewlett Packard Enterprise shares are held by company insiders. Comparatively, 0.4% of EMC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
Hewlett Packard Enterprise has a beta of 2.72, indicating that its stock price is 172% more volatile than the S&P 500. Comparatively, EMC has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.
Hewlett Packard Enterprise pays an annual dividend of $0.26 per share and has a dividend yield of 1.8%. EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. Hewlett Packard Enterprise pays out 371.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EMC pays out 43.0% of its earnings in the form of a dividend. Hewlett Packard Enterprise has increased its dividend for 3 consecutive years. Hewlett Packard Enterprise is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Hewlett Packard Enterprise and EMC’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hewlett Packard Enterprise||$48.29 billion||0.48||$6.92 billion||$0.07||203.74|
Hewlett Packard Enterprise has higher revenue and earnings than EMC. EMC is trading at a lower price-to-earnings ratio than Hewlett Packard Enterprise, indicating that it is currently the more affordable of the two stocks.
This table compares Hewlett Packard Enterprise and EMC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hewlett Packard Enterprise||0.29%||9.04%||3.72%|
Hewlett Packard Enterprise beats EMC on 8 of the 13 factors compared between the two stocks.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise Company is a provider of technology solutions. The Company’s segments include: Enterprise Group, Software, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others.
EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.
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