Definitive Analysis
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HP Inc. (HPQ)

Company Dividend Discount ModelIndustry: Computer HardwareSector: Technology

Valuation Snapshot

Stable Growth$17.87 - $25.49$21.61
Multi-Stage$30.27 - $33.22$31.72
Blended Fair Value$26.67
Current Price$27.67
Upside-3.63%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS1.76%-1.38%1.141.131.091.090.981.051.020.940.940.90
YoY Growth--1.21%3.66%0.00%10.55%-5.92%2.78%7.90%0.56%4.20%-31.36%
Dividend Yield--4.12%3.47%3.79%3.73%2.68%4.27%4.77%4.28%4.02%5.98%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,529.00
(-) Cash Dividends Paid (M)1,088.00
(=) Cash Retained (M)1,441.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)505.80316.13189.68
Cash Retained (M)1,441.001,441.001,441.00
(-) Cash Required (M)-505.80-316.13-189.68
(=) Excess Retained (M)935.201,124.881,251.33
(/) Shares Outstanding (M)953.75953.75953.75
(=) Excess Retained per Share0.981.181.31
LTM Dividend per Share1.141.141.14
(+) Excess Retained per Share0.981.181.31
(=) Adjusted Dividend2.122.322.45
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.48%-1.48%-0.48%
Fair Value$17.87$21.61$25.49
Upside / Downside-35.42%-21.89%-7.88%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,529.002,491.602,454.762,418.452,382.692,347.452,417.88
Payout Ratio43.02%52.42%61.81%71.21%80.60%90.00%92.50%
Projected Dividends (M)1,088.001,306.021,517.351,722.141,920.552,112.712,236.54

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.48%-1.48%-0.48%
Year 1 PV (M)1,184.951,197.101,209.25
Year 2 PV (M)1,249.081,274.831,300.84
Year 3 PV (M)1,286.251,326.231,367.02
Year 4 PV (M)1,301.471,355.681,411.57
Year 5 PV (M)1,298.981,366.961,437.76
PV of Terminal Value (M)22,550.2623,730.3924,959.41
Equity Value (M)28,871.0030,251.1931,685.86
Shares Outstanding (M)953.75953.75953.75
Fair Value$30.27$31.72$33.22
Upside / Downside9.40%14.63%20.07%

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