Stock of the Day

September 5, 2022

HP (HPQ)

$34.63
-$0.09 (-0.3%)
Market Cap: $32.56B

About HP

HP Inc. provides products, technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors worldwide. It operates through Personal Systems and Printing segments. The Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin clients, commercial tablets and mobility devices, retail point-of-sale systems, displays and other related 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; and laserJet and enterprise, inkjet and printing, graphics, and 3D printing solutions. The company was formerly known as Hewlett-Packard Company and changed its name to HP Inc. in October 2015. HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.

HP Bull Case

Here are some ways that investors could benefit from investing in HP Inc.:

  • HP Inc. has a strong dividend yield of 3.33%, which can provide a steady income stream for investors. The company recently declared a dividend of $0.2894 per share, reflecting its commitment to returning value to shareholders.
  • Institutional ownership is high at 77.53%, indicating strong confidence from large investors. This can be a positive signal for retail investors, as institutional investors often conduct extensive research before making investment decisions.
  • Recent analyst upgrades, such as the target price increase from Sanford C. Bernstein from $32.00 to $34.00, suggest that there is optimism about HP Inc.'s future performance. Analysts' ratings can influence investor sentiment and stock price movements.
  • HP Inc. operates in diverse segments, including Personal Systems and Printing, which can help mitigate risks associated with market fluctuations. This diversification allows the company to tap into various revenue streams.
  • The stock price is currently around $36.23, which is close to the average target price set by analysts. This suggests that the stock may be fairly valued, providing a potential entry point for investors looking to buy.

HP Bear Case

Investors should be bearish about investing in HP Inc. for these reasons:

  • Insider selling has been notable, with a total of 273,035 shares sold worth $9,670,068 in the last 90 days. This could indicate a lack of confidence from those who are most familiar with the company's operations.
  • HP Inc. has received mixed ratings from analysts, with one sell rating and a majority holding ratings. This lack of strong buy recommendations may suggest uncertainty about the company's growth prospects.
  • Recent price target reductions by firms like Citigroup, which lowered its target from $37.00 to $36.50, could indicate a bearish outlook on the stock's performance in the near term.
  • The payout ratio is 41.28%, which, while sustainable, indicates that a significant portion of earnings is being distributed as dividends. This could limit the funds available for reinvestment in growth opportunities.
  • HP Inc. faces competition in the technology sector, which can impact market share and profitability. The rapidly changing landscape requires continuous innovation and adaptation to maintain a competitive edge.

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