Analyzing HP (HPQ) and Its Competitors

HP (NYSE: HPQ) is one of 31 public companies in the “Computer Hardware” industry, but how does it weigh in compared to its competitors? We will compare HP to similar companies based on the strength of its institutional ownership, dividends, risk, profitability, analyst recommendations, valuation and earnings.

Profitability

This table compares HP and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HP 4.66% -64.93% 9.10%
HP Competitors 3.91% 10.02% 5.95%

Earnings & Valuation

This table compares HP and its competitors gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
HP $50.64 billion $4.20 billion 15.96
HP Competitors $21.04 billion $4.38 billion 19.91

HP has higher revenue, but lower earnings than its competitors. HP is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for HP and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HP 0 8 13 0 2.62
HP Competitors 267 1420 3178 116 2.63

HP currently has a consensus price target of $21.43, indicating a potential downside of 2.70%. As a group, “Computer Hardware” companies have a potential downside of 6.81%. Given HP’s higher probable upside, research analysts plainly believe HP is more favorable than its competitors.

Institutional and Insider Ownership

79.2% of HP shares are held by institutional investors. Comparatively, 62.0% of shares of all “Computer Hardware” companies are held by institutional investors. 0.6% of HP shares are held by insiders. Comparatively, 13.9% of shares of all “Computer Hardware” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

HP has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500. Comparatively, HP’s competitors have a beta of 1.29, meaning that their average share price is 29% more volatile than the S&P 500.

Dividends

HP pays an annual dividend of $0.53 per share and has a dividend yield of 2.4%. 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 70.6% of their earnings in the form of a dividend.

Summary

HP competitors beat HP on 8 of the 15 factors compared.

About HP

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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