HP Inc.: A Value Buy Backed by Yield and Cost Discipline
Company Overview
- Ticker: HPQ (NYSE)
- Headquarters: Palo Alto, California, USA
- Founded: 1939 (spun off as HP Inc. in 2015)
- CEO: Enrique Lores (as of 2025)
- Industry: Computer Manufacturing
Core Business
HP Inc. is a global provider of personal computers (PCs), printers, and related imaging and printing supplies. The company operates through two key segments: Personal Systems and Printing.
- Personal Systems: Commercial and consumer PCs, notebooks, desktops, workstations, and gaming devices.
- Printing: Supplies (toner/ink), hardware (printers, plotters), and 3D printing solutions.
- Geographic Reach: Operates in over 170 countries with a broad and diversified customer base.
- Strategic Focus: Expanding high-margin services, hybrid work solutions, and sustainability in circular printing.
Industry Overview
- Global PC Market: Estimated size of $230 billion in 2024 with flat to low-single-digit CAGR; post-pandemic normalization but strong refresh cycles.
- Printing Industry: Growing in industrial and 3D printing, offsetting structural declines in home/office.
- Key Trends: Hybrid work adoption, device-as-a-service models, and digital workplace solutions.
- Competition: Lenovo, Dell, Canon, Epson, Apple, and Xerox.
Key Growth Drivers
- PC Refresh Cycle: Ongoing commercial device refresh driven by hybrid work and Windows 11 migration.
- Cost Discipline: Aggressive cost restructuring, improving operating margins and cash flows.
- Subscription Models: Expansion of HP+ and Instant Ink driving recurring revenues and margin uplift.
- Industrial/3D Printing Growth: Investing in commercial, industrial, and 3D printing solutions.
- Shareholder Returns: Strong commitment to dividends and share repurchases.
Dividend Profile
- Dividend Yield: 4.7% (as of July 2025)
- Payout Ratio: 40% of earnings
- Dividend Growth: 12 consecutive years of dividend increases
- Share Repurchase Program: Returned over US $4 Bn annually to shareholders in recent years
- Sustainability: Well-covered dividend supported by robust free cash flow
Financial Overview (FY 2024)
- Revenue: $53.15 billion
- Net Income: $2.77 billion
- Operating Income: $3.94 billion
- Total Assets: $39.91 billion
- Total Debt: $9.62 billion
- P/E Ratio (Current): 9.62x
Key Financials
Risks
Target
Right now, the company is trading at US $25.01, with a 1-year projected target of around US $32.45 and a low estimation of US $23; the average price target will be US $30.
MarketFacts gives a “Buy” rating on the stock at the closing price of US $25.01 as of August 6th, 2025.
Disclaimer:
The information provided in this document and the resources available for download are intended for informational purposes only and should not be interpreted as financial advice. While the content is based on thorough research and is accurate to the best of our knowledge, it is not a substitute for professional financial guidance. We strongly recommend consulting with a financial advisor to discuss your specific situation and obtain tailored advice before making any financial decisions.
