Financial Analysis: HP (HPQ) versus Its Peers
HP (NYSE: HPQ) is one of 32 public companies in the “Computer Hardware” industry, but how does it compare to its peers? We will compare HP to similar businesses based on the strength of its analyst recommendations, earnings, institutional ownership, profitability, risk, valuation and dividends.
Volatility & Risk
HP has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500. Comparatively, HP’s peers have a beta of 1.03, suggesting that their average stock price is 3% more volatile than the S&P 500.
Valuation & Earnings
This table compares HP and its peers revenue, earnings per share (EPS) and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|HP||$48.24 billion||$2.50 billion||15.56|
|HP Competitors||$25.85 billion||$3.18 billion||195.94|
HP has higher revenue, but lower earnings than its peers. HP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
This is a breakdown of current recommendations and price targets for HP and its peers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
HP presently has a consensus price target of $21.58, indicating a potential upside of 0.49%. As a group, “Computer Hardware” companies have a potential upside of 12.07%. Given HP’s peers higher probable upside, analysts clearly believe HP has less favorable growth aspects than its peers.
HP pays an annual dividend of $0.53 per share and has a dividend yield of 2.5%. HP pays out 38.4% of its earnings in the form of a dividend. As a group, “Computer Hardware” companies pay a dividend yield of 3.1% and pay out 57.8% of their earnings in the form of a dividend.
Institutional and Insider Ownership
79.2% of HP shares are owned by institutional investors. Comparatively, 61.9% of shares of all “Computer Hardware” companies are owned by institutional investors. 0.6% of HP shares are owned by company insiders. Comparatively, 13.9% of shares of all “Computer Hardware” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares HP and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
HP peers beat HP on 8 of the 15 factors compared.
HP Company Profile
HP Inc. is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses, and enterprises, including customers in the government, health and education sectors. The Company provides personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. Its segments include Personal Systems, Printing and Corporate Investments. The Personal Systems segment provides Commercial personal computers (PCs), Consumer PCs, workstations, thin clients, Commercial tablets and mobility devices, retail point-of-sale systems, displays and other accessories, software, support and services for the commercial and consumer markets. The Printing segment provides consumer and commercial printer hardware, supplies, media, solutions and services, as well as scanning devices. The Corporate Investments segment includes the operations of HP Labs and certain business incubation projects.
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