Opinions
Lorne Steinberg
Hewlett-Packard Co
HPQ-N
COMMENT
Aug 08, 2016
Stock price when the opinion was issued
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Premium contentHP trades at 11.83x compared to Dell’s 28x. It also pays a 3.18% dividend vs. Dell’s 1.28%. Though the two companies make up half the market’s PC sales, HP says its new line of AI PC’s won’t make a dent in their earnings until the second half of 2024 and particularly 2025. The company’s Q2 total revenue for was $12.8 billion, down slightly from last year's $12.91 billion, but better than the $12.59 billion the street expected.
Premium contentHP Inc. is an information technology company, which engages in the provision of personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services. It operates through the following segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktop and notebook personal computers, 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 business has amazing cash flow. Margins on colour ink cartridges are massive. This is trading at a ridiculous multiple, probably 6 or 7 times earnings. There is no question that there will be some revenue decline for the next couple of years. Thinks there will be a lot of shareholder value created here.