Hewlett Packard Enterprise (HPE) vs. Lexmark International (LXK) Financial Review
Hewlett Packard Enterprise (NYSE: HPE) and Lexmark International (NYSE:LXK) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.
This table compares Hewlett Packard Enterprise and Lexmark International’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%|
This is a summary of current recommendations and price targets for Hewlett Packard Enterprise and Lexmark International, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hewlett Packard Enterprise||2||16||11||0||2.31|
Hewlett Packard Enterprise currently has a consensus target price of $18.00, suggesting a potential upside of 21.62%. Given Hewlett Packard Enterprise’s higher possible upside, research analysts clearly believe Hewlett Packard Enterprise is more favorable than Lexmark International.
Hewlett Packard Enterprise pays an annual dividend of $0.26 per share and has a dividend yield of 1.8%. Lexmark International pays an annual dividend of $1.44 per share and has a dividend yield of 3.6%. 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. Lexmark International pays out -133.3% of its earnings in the form of a dividend. Hewlett Packard Enterprise has increased its dividend for 6 consecutive years. Lexmark International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Hewlett Packard Enterprise and Lexmark International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hewlett Packard Enterprise||$48.29 billion||0.50||$6.92 billion||$0.07||211.46|
Hewlett Packard Enterprise has higher revenue and earnings than Lexmark International. Lexmark International 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.
Institutional and Insider Ownership
81.3% of Hewlett Packard Enterprise shares are held by institutional investors. Comparatively, 81.8% of Lexmark International shares are held by institutional investors. 0.9% of Hewlett Packard Enterprise shares are held by insiders. Comparatively, 2.8% of Lexmark International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Hewlett Packard Enterprise has a beta of 2.71, meaning that its share price is 171% more volatile than the S&P 500. Comparatively, Lexmark International has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.
Hewlett Packard Enterprise beats Lexmark International on 8 of the 13 factors compared between the two stocks.
Hewlett Packard Enterprise Company Profile
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.
Lexmark International Company Profile
Lexmark International, Inc. is a United States-based company, which is a provider of printing and imaging products, software, solutions and services. The Company’s software scans everything from spreadsheets to medical images, and provides services to banking, healthcare, insurance and retail companies. It creates enterprise software, hardware and services that remove inefficiencies of information silos and disconnected processes. It offers various services, such as managed print services, hardware warranty and repair service, professional services and enterprise software services. It offers solutions, such as financial process automation, business process management, Web information integration and consumer loan origination. Its hardware category includes equipment collection program, and Smart multifunction product (MFP) includes device management and mobile print solutions. It produces and distributes millions of supplies each year, including ink, toner and paper.
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