Hewlett Packard Enterprise (NYSE: HPE) and HP (NYSE:HPQ) are both large-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Valuation and Earnings
This table compares Hewlett Packard Enterprise and HP’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hewlett Packard Enterprise||$48.08 billion||0.44||$7.31 billion||$0.07||187.46|
|HP||$50.64 billion||0.64||$4.20 billion||$1.38||14.12|
Hewlett Packard Enterprise has higher revenue, but lower earnings than HP. HP is trading at a lower price-to-earnings ratio than Hewlett Packard Enterprise, indicating that it is currently the more affordable of the two stocks.
Hewlett Packard Enterprise pays an annual dividend of $0.26 per share and has a dividend yield of 2.0%. HP pays an annual dividend of $0.53 per share and has a dividend yield of 2.7%. Hewlett Packard Enterprise pays out 371.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HP pays out 38.4% of its earnings in the form of a dividend. HP is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Hewlett Packard Enterprise and HP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hewlett Packard Enterprise||0.29%||9.04%||3.72%|
Risk & Volatility
Hewlett Packard Enterprise has a beta of 2.72, indicating that its stock price is 172% more volatile than the S&P 500. Comparatively, HP has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Hewlett Packard Enterprise and HP, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hewlett Packard Enterprise||2||16||11||0||2.31|
Hewlett Packard Enterprise presently has a consensus price target of $18.28, indicating a potential upside of 39.35%. HP has a consensus price target of $20.58, indicating a potential upside of 5.62%. Given Hewlett Packard Enterprise’s higher probable upside, equities research analysts plainly believe Hewlett Packard Enterprise is more favorable than HP.
Institutional and Insider Ownership
80.2% of Hewlett Packard Enterprise shares are held by institutional investors. Comparatively, 79.2% of HP shares are held by institutional investors. 0.9% of Hewlett Packard Enterprise shares are held by company insiders. Comparatively, 0.6% of HP shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
HP beats Hewlett Packard Enterprise on 10 of the 16 factors compared between the two stocks.
Hewlett Packard Enterprise Company Profile
Hewlett Packard Enterprise Company is a provider of technology solutions. The Company’s segments include: Enterprise Group, Software, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others.
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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