HP Inc's Dividend Analysis
Unpacking the Dividend Profile of HP Inc (NYSE:HPQ)
HP Inc (NYSE:HPQ) recently announced a dividend of $0.28 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-03-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into HP Inc's dividend performance and assess its sustainability.
What Does HP Inc Do?
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HP Inc, formerly Hewlett-Packard, is a behemoth in the PC and printing markets. It has focused on these markets since it exited IT infrastructure in 2015 with the split from Hewlett Packard Enterprise. HP Inc concentrates on the commercial market but maintains sales of consumer devices and printers. The firm has a broad and global customer base, with only one-third of sales coming from the US. It completely outsources manufacturing and relies heavily on channel partners for its sales and marketing.
A Glimpse at HP Inc's Dividend History
HP Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down HP Inc's Dividend Yield and Growth
As of today, HP Inc currently has a 12-month trailing dividend yield of 3.46% and a 12-month forward dividend yield of 3.59%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, HP Inc's annual dividend growth rate was 14.20%. Extended to a five-year horizon, this rate decreased to 14.00% per year. And over the past decade, HP Inc's annual dividends per share growth rate stands at 6.10%.
Based on HP Inc's dividend yield and five-year growth rate, the 5-year yield on cost of HP Inc stock as of today is approximately 6.66%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-01-31, HP Inc's dividend payout ratio is 0.29.
HP Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks HP Inc's profitability 8 out of 10 as of 2024-01-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.