HP (HPQ) Showcased on Cover of Barron's as 'Picture of Health'
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Price: $31.32 +4.33%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 3.8%
EPS Growth %: -28.0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 3.8%
EPS Growth %: -28.0%
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The cover story in this weekend's edition of Barron's highlighted Hewlett-Packard (NYSE: HPQ) and its highly-acclaimed Chairman, CEO, and President, Mark Hurd. The article describes Hewlett-Packard as a "picture of health" and points out that the company has become increasingly more profitable under Hurd's tenure. Despite the weakening global economy, Hurd expects HP to report modest earnings growth during '09.
The Barron's article pits HP against two top competitors, Dell (Nasdaq: DELL) and IBM (NYSE: IBM). In light of a recent Q4 pre-announcement which came in better-than-the Street estimates, Hewlett-Packard still trades at a lower P/E than either Dell or IBM. Based on FY10 earnings estimates, HP trades at about 8.25x, while Dell and IBM trade around 8.32x and 8.37x, respectively.
Barron's also believes HP's high level of operational and geographic diversification will continue to make it a prime candidate for investors looking for a strong defensive tech play. The article notes that HP's 3 business units -- imaging and printing, personal systems, and technology solutions -- account for 25%, 36% and 38% of annual sales. Hewlett-Packard also spreads its business globally, with about 60% of revenue coming from outside the US.
Lastly, Barron's believes "the biggest boost to profits and margins" will come from HP's recent acquisition of EDS. Moreover, the purchase of EDS is expected to allow Hewlett-Packard to compete more aggressively with IBM in the space for large corporate deals.
Despite the positive piece in Barron's, shares of Hewlett-Packard are trading only marginally higher just after the session open. The stock most recently traded at $35.12, up 0.4% from Friday's close.
Hewlett-Packard Company provides a range of products, technologies, software, solutions, and services worldwide.
The Barron's article pits HP against two top competitors, Dell (Nasdaq: DELL) and IBM (NYSE: IBM). In light of a recent Q4 pre-announcement which came in better-than-the Street estimates, Hewlett-Packard still trades at a lower P/E than either Dell or IBM. Based on FY10 earnings estimates, HP trades at about 8.25x, while Dell and IBM trade around 8.32x and 8.37x, respectively.
Barron's also believes HP's high level of operational and geographic diversification will continue to make it a prime candidate for investors looking for a strong defensive tech play. The article notes that HP's 3 business units -- imaging and printing, personal systems, and technology solutions -- account for 25%, 36% and 38% of annual sales. Hewlett-Packard also spreads its business globally, with about 60% of revenue coming from outside the US.
Lastly, Barron's believes "the biggest boost to profits and margins" will come from HP's recent acquisition of EDS. Moreover, the purchase of EDS is expected to allow Hewlett-Packard to compete more aggressively with IBM in the space for large corporate deals.
Despite the positive piece in Barron's, shares of Hewlett-Packard are trading only marginally higher just after the session open. The stock most recently traded at $35.12, up 0.4% from Friday's close.
Hewlett-Packard Company provides a range of products, technologies, software, solutions, and services worldwide.
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