This week, I'm looking for the fifth technology representative of six for my Ivy portfolio.
The technology sector includes nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health and information technology and services to internet, scientific instruments, software, solar and all such technological enterprises.
Today I'm reviewing a large-cap computer systems company named HP Inc. Their trading ticker symbol is HPQ.
- HP Inc. is a leading provider of computers, printers, and printer supplies. The company's two operating business segments are its personal systems, containing notebooks, desktops, and workstations and its printing segment which contains supplies, consumer hardware, and commercial hardware.
- In 2015, Hewlett-Packard was separated into HP Inc. and Hewlett Packard Enterprise. The Palo Alto, California based company sells on a global scale with 63% of fiscal 2017 revenue derived from outside the United States.
- HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.
I use three key data points to gauge HP Inc:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest.
Those first three primary keys, however, best tell whether a company has made, is making, and will make money.
HPQ Price
HP's price per share closed at $19.92 yesterday. A year ago its price was $23.62. Price fell $4.60 or almost 19.5% in the past year.
Assuming HP's stock trades in the range of $17.50 to $25.00 this year, HP's recent $19.92 price could rise by $2.08 and go to $22.00 by early-June, 2020.
HPQ Dividends
HP's most recent quarterly dividend was $0.1602 declared May 15th and payable July 3rd.
That $0.1602 Q payout produces an annual payout of $0.64 per year and a resultant yield of 3.22% based on yesterday's $19.92 closing price.
Gains For HPQ?
Adding the $0.64 annual estimated dividend to my $2.08 estimate of HP's price upside shows a $2.72 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little under $1,000.00 today at the $19.92 recent stock price would buy us 50 HP Inc. shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.20 per share.
Subtract that $0.20 brokerage cost from the estimated $2.72 gross annual gain leaves a net gain of $2.52 X 50 shares = $126.00 or a 12.6% net gain on a $996.00 investment.
Therefore, HP Inc. whose trading ticker symbol is HPQ, now shows a possible net gain of 12.6% including a 3.22% dividend yield.
Sixteen brokers track HP Inc. stock:
Seven say "buy" HPQ.
Eight say ''hold" HPQ shares.
One thinks HPQ will "underperform" peers.
Their consensus rating is 2.188 or "outperform."
Therefore, you can look at HP Inc and see it has made money, is making money, and could net a 12.6% gain including a 3.22% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to determine if HP Inc. is worth your time and money.
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