Key Takeaways
NOTE: HP released earnings on 5/28 and announced quarterly EPS of $0.71, missing expectations by 11.63%. See more here.
📈 HP offers a 4.10% forward dividend yield with a stable payout ratio of around 40%, supported by consistent dividend growth over the past several years.
💵 The company generated $4 billion in operating cash flow and $3.27 billion in free cash flow over the trailing twelve months, maintaining strong cash efficiency even in a mixed demand environment.
🧐 Analysts maintain a consensus rating of “Hold” with a price target near $33.83, reflecting cautious optimism amid modest revenue growth and ongoing strategic shifts.
Updated 5/13/25
HP Inc. has positioned itself as a reliable dividend payer backed by steady cash flows and a disciplined capital return strategy. With a forward yield over 4%, a payout ratio near 40%, and consistent free cash flow generation, the company continues to appeal to income-focused investors. Recent earnings showed modest revenue growth, stable operating results, and a reaffirmed focus on innovation, particularly in AI-enabled PCs.
Leadership remains focused on operational efficiency and long-term transformation. CEO Enrique Lores has emphasized expanding AI offerings and diversifying the supply chain, while HP continues to manage its financials conservatively. Trading around \$28 with a reasonable valuation, HP maintains shareholder-friendly policies, even amid shifting market dynamics.
Recent Events
HP Inc. isn’t the kind of stock that makes headlines every week, but that’s not necessarily a bad thing—especially for income-focused investors. Over the past year, the stock has slipped a bit, down around 8%, even as the broader market has pushed higher. While that might sound like a red flag, it actually sets up a more attractive yield for those of us who care more about reliable dividends than day-to-day price swings.
Revenue is holding steady, ticking up 2.4% year-over-year. That’s not a blowout, but it shows HP isn’t fading into the background. The bigger concern is earnings, which dipped by 9.2% compared to the same quarter last year. Still, HP’s business model is mature and heavily cash-generative. Net income over the past twelve months came in at $2.72 billion, and total revenue hit $53.88 billion.
What really stands out is cash flow. HP generated $4 billion in operating cash flow and managed to turn nearly $3 billion of that into free cash flow. That kind of financial discipline is what keeps dividends safe—and growing—even when growth slows elsewhere in the business.
Key Dividend Metrics
📈 Forward Dividend Yield: 4.10%
💰 Annual Dividend Rate: $1.16
📆 5-Year Average Yield: 3.22%
📊 Payout Ratio: 40.15%
💎 Dividend Date: April 2, 2025
🔍 Ex-Dividend Date: March 12, 2025
Dividend Overview
HP’s dividend isn’t flashy, but it’s steady—and that’s exactly what many income investors are looking for. With a forward yield sitting at 4.10%, HP is offering more income than many other tech names. That yield is notably higher than its five-year average of 3.22%, thanks largely to the recent pullback in the stock price.
At an annual payout of $1.16 per share, HP’s dividend is comfortably covered by earnings. The 40.15% payout ratio gives the company plenty of breathing room, even if profitability takes another small hit. It’s the kind of payout that doesn’t require HP to dip into reserves or load up on debt. Instead, it’s supported by solid, recurring cash flow.
Cash flow is one of HP’s strongest points. With $2.9 billion in levered free cash flow over the past year, the company isn’t struggling to fund its dividend. This is a business that’s been through multiple tech cycles and continues to manage its capital with a tight grip. Even though the company carries about $10.9 billion in total debt, it hasn’t needed to compromise on returns to shareholders.
It’s also worth noting that HP’s current ratio sits at 0.72—not the most liquid balance sheet, but nothing alarming given the company’s operating stability. It’s a company that knows how to run lean when needed.
Dividend Growth and Safety
HP may not raise its dividend by leaps and bounds each year, but it does raise it. Since becoming a standalone company in 2015, HP has steadily increased its dividend annually. The growth isn’t explosive, averaging around 3.22% over the last five years, but it’s consistent. That’s a key trait for investors looking to build reliable income over time.
The stability of HP’s payout stems from how the business handles its cash. With a payout ratio below 50%, there’s room to grow the dividend without putting strain on the balance sheet. Even if earnings flatten or dip again, the company isn’t in a position where the dividend would be threatened. That kind of coverage speaks volumes about how seriously management takes its capital return strategy.
HP’s dividend is further supported by shareholder behavior. A massive 81.91% of the float is held by institutions. That level of institutional ownership reflects confidence in the company’s ability to generate cash and return it consistently to shareholders.
One final note—HP carries a beta of 1.34. So, while it’s technically in the tech space, it doesn’t behave like a high-flying growth stock. There’s some volatility, yes, but it’s manageable. For long-term investors focused on income, those price dips can offer attractive opportunities to lock in a higher yield.
This isn’t a company that’s trying to dazzle the market. It’s doing what it’s always done—keeping the business running efficiently, generating cash, and sending a meaningful portion of that cash back to shareholders. For dividend investors, that kind of dependability has real value.
Cash Flow Statement
HP’s cash flow profile continues to reflect the disciplined approach of a mature, cash-generative company. Over the trailing twelve months, operating cash flow totaled $4 billion, showing an increase from the previous two years. Free cash flow also improved slightly to $3.27 billion, demonstrating that HP is efficiently converting its core operations into excess capital after accounting for necessary capital expenditures.
On the financing side, HP returned a significant amount of cash to shareholders, with $2.8 billion in outflows, primarily from stock repurchases and debt repayment. The company remains consistent in managing its debt load while balancing shareholder returns. Investing activities were modest, with only $718 million in net outflows—far more restrained than the $3.5 billion seen in 2021. Ending cash for the period came in at $2.89 billion, maintaining a stable liquidity position. Overall, the cash flow statement tells the story of a company focused on capital efficiency, shareholder returns, and operational stability.
Analyst Ratings
HP Inc. has recently seen a mix of upgrades and downgrades from analysts, each reflecting changing expectations around the company’s financial outlook and the broader tech hardware market. 📉 The consensus rating currently sits at a “Hold,” with analysts targeting an average price of around $33.83 over the next 12 months.
In April, one firm maintained its “Outperform” rating but trimmed the price target from $40 to $32. The reason? A more cautious view on PC demand and potential pressure on margins heading into the second half of the year. Another major firm echoed this sentiment, holding its “Overweight” position but pulling its target down from $40 to $29, signaling that while they still see long-term potential, near-term performance might lag.
On the more conservative end, a large investment bank kept its “Neutral” stance but slashed the target significantly—from $36.50 all the way down to $25. The concern here centers on HP’s ability to navigate softer demand while maintaining profitability. Still, not every analyst is pulling back. One institution slightly bumped up its target from $35 to $36 while maintaining an “Equal Weight” rating, essentially signaling a wait-and-see approach.
Earnings Report Summary
Solid Start to the Fiscal Year
HP Inc. kicked off fiscal 2025 with a modest but positive step forward. Revenue came in at $13.5 billion for the quarter, a slight increase from the same time last year. The boost was largely thanks to strength in the Personal Systems segment, which saw about 5% growth. Demand for commercial PCs—especially those geared toward AI capabilities—played a big role here.
Printing, on the other hand, remains a softer spot. That part of the business dipped by 2%, continuing a trend that’s been in place for a while now. It’s a reminder that while HP is growing in certain areas, it’s still working through headwinds in others.
Profit and Cash Flow
Earnings came in at $0.59 per share on a GAAP basis, which was slightly lower than a year ago. Adjusted EPS, though, hit $0.74, which landed within the range the company had set. Free cash flow was on the lighter side this quarter at $100 million, though operating cash flow was a bit better at $400 million. Nothing flashy, but nothing alarming either—it was a stable quarter from a cash generation standpoint.
What Leadership Had to Say
CEO Enrique Lores leaned into HP’s progress on innovation and efficiency. One of the highlights was the growing presence of AI in their product mix. In fact, about 15% of PC shipments were AI-enabled, and they’re aiming to push that figure to 25% by the end of the fiscal year. It’s clear HP sees this as a long-term differentiator in a competitive PC market.
Another big shift is in the company’s manufacturing footprint. Lores noted that by the end of fiscal 2025, more than 90% of HP’s North American product line will be made outside of China. That’s a strategic move, aimed at dodging tariff issues and making the supply chain more resilient.
Looking Ahead
For the next quarter, HP expects adjusted EPS to land somewhere between $0.75 and $0.85. As for the full year, the forecast sits between $3.45 and $3.75. It’s a measured outlook, which fits the company’s tone—focused on execution more than surprises.
In a positive move for shareholders, HP also raised its annual dividend by 5%, taking it to $1.16 per share. For income-focused investors, that’s another signal that the company is staying committed to returning capital, even as it navigates a changing tech landscape.
Management Team
HP Inc. is led by a seasoned executive team that blends technological know-how with financial discipline and operational depth. At the center is Enrique Lores, who took over as President and CEO in November 2019. His leadership has focused heavily on driving innovation, especially in AI-powered personal systems, while tightening operational execution across the board.
Karen Parkhill, who stepped in as Chief Financial Officer in August 2024, adds deep financial expertise from her background in healthcare and banking. She plays a key role in managing HP’s capital structure and ensuring returns remain a core priority for shareholders.
Alex Cho leads the Personal Systems division, keeping HP competitive in a market where hardware demands continue to evolve. Meanwhile, Anneliese Olson steers the Imaging, Printing, and Solutions business, working to stabilize and evolve a segment still central to HP’s identity. Dave Shull is pushing the company deeper into the services side through HP Solutions, expanding the firm’s offerings beyond hardware.
Supporting this core group, Dave McQuarrie runs global sales and commercial operations, Julie Jacobs manages legal and compliance matters, and Antonio Lucio oversees branding and corporate communications. Together, the team has been steering HP through an era of transformation with a focus on execution and long-term value creation.
Valuation and Stock Performance
HP’s stock is currently trading around $28.78, showing a modest bounce off its 52-week low of $21.21 but still trailing its recent high near $40. That places the company’s market cap just over $24 billion. The stock’s valuation remains attractive, with a trailing price-to-earnings ratio of 9.3 and a forward P/E closer to 7.2. These numbers suggest the market sees HP as a steady earner but isn’t pricing in major growth.
Analyst sentiment is mixed. Most categorize the stock as a hold, reflecting a sense that the current valuation is reasonable but without near-term catalysts for a breakout. The company’s strong free cash flow and consistent dividends provide a cushion for investors, even as the business navigates a slower growth environment.
Long-term performance has been uneven, reflecting the mature nature of HP’s markets and the broader tech landscape’s tendency to favor faster-growing names. However, the company continues to appeal to income-focused investors, especially those prioritizing stability and capital returns.
Risks and Considerations
HP operates in sectors that are both mature and fiercely competitive. The PC and printing industries face ongoing price pressure and changing demand patterns, particularly as work and learning habits shift post-pandemic. Staying relevant means HP must constantly reinvest in innovation, especially in AI and hybrid solutions.
Global economic trends and supply chain dynamics remain important factors. HP has done well to diversify its manufacturing footprint, but geopolitical tensions and currency fluctuations still pose risks. Additionally, the company relies heavily on international markets, which can expose it to uneven regulatory environments and trade barriers.
There’s also the broader transition to sustainability. Consumers and regulators alike are putting more pressure on tech companies to reduce environmental impact. While HP has taken steps in this direction, any missteps could harm its brand and lead to higher compliance costs.
Debt levels, while manageable, are worth watching. The company has continued to return capital through dividends and buybacks, but a prolonged downturn in hardware demand could strain that balance over time. That said, HP’s strong cash generation offers some flexibility.
Final Thoughts
HP Inc. is a mature player in the tech world, but it’s not standing still. The leadership team is pushing forward with AI investments and operational streamlining, while still maintaining a strong focus on returning cash to shareholders. The company is aware of where it sits in the market—solid, reliable, and cash-generative—but it’s also showing signs of transformation where it counts.
For investors who value income and prefer names that won’t swing wildly with every market headline, HP remains a name worth watching. Its valuation appears reasonable, its dividend yield is attractive, and the team steering the ship has experience managing through different phases of the business cycle. Risks are present, as they always are, but HP’s track record of execution provides a firm foundation as it looks toward the future.