🚢 Below $20 with that kind of yield, HPQ is back in “boring‑cheap cash‑flow machine” territory rather than anything you need to be afraid of. If rn273 wants income and can live with a sluggish PC/print story while Windows 11 and AI PCs grind through the installed base, this is a perfectly respectable place to park some money and sell premium against.[seekingalpha]
Where HPQ actually is now
- Price/yield: Stock recently around $19–20, with an annual dividend of about $1.20 ( $0.30 quarterly), which does indeed put the yield in the 6–6.5% neighborhood at today’s quote.[dividendmax]
- Payout & coverage:
- Trailing payout ratio ~40% of earnings and under 30% of free cash flow; dividend has 15‑year growth history.[stocksguide]
- Free cash flow guidance for FY25–26 is $2.6–3.6B a year, versus a market cap that makes the FCF yield ~12–14% at these prices.[intellectia]
So this is not a reach‑for‑yield trap where they’re paying out more than they earn; the cash supports the check.
Business / outlook in a sentence
- PCs: HP has stacked six consecutive quarters of revenue growth, is gaining share in premium and AI PCs, and sees the Windows 11 refresh plus AI PC penetration (targeting 40–50% of shipments by 2026) as ongoing tailwinds, even as unit volumes overall are flattish.[hp]
- Print: Still the draggy side, but more subscription/industrial mix and cost savings to defend margins.[investing]
- 2026 guidance: Non‑GAAP EPS $2.90–3.20; at $20 that’s a forward P/E ~7x, and forward P/S around 0.35–0.4x.[morningstar]
That’s exactly the “severely mispriced cash‑flow powerhouse” framing some analysts are using: mid‑single‑digit top‑line, heavy FCF, single‑digit P/E, fat yield.[stockcircle]
Short answer for rn273
- Below $20 with a 6‑ish% dividend that’s covered, HPQ is a legit income play, not a value trap at these numbers.[
