Does HPQ’s Steady Buybacks Reflect Strategic Strength or Hint at Shifting Priorities?

• HP Inc. recently announced its fourth quarterly cash dividend for fiscal year 2025, with US$0.2894 per share to be paid on October 1 to shareholders of record as of September 10, and confirmed it returned about US$400 million to shareholders in the second quarter through dividends and repurchasing approximately 3 million shares.
• Alongside strong capital returns, HP continues to show a high return on capital employed above tech industry averages, although this figure has decreased from five years ago.
• We'll explore how HP's commitment to shareholder returns, especially through continued buybacks, may influence its broader investment narrative.

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HP Investment Narrative Recap

To own HP stock today, you likely need to believe in its ability to balance stable shareholder returns with innovation-led growth, despite a changing tech landscape and sector headwinds. The new dividend announcement and recent share repurchases support a commitment to capital returns, but do not materially change the largest near-term catalyst, namely, HP's push into AI-enabled devices, or address the biggest short-term risk: exposure to macroeconomic shifts in hardware demand and competitive margin pressures.

Among recent developments, HP’s consistent dividend payouts, including the US$0.2894 per share announced for October, stand out for their relevance to investor expectations. While these payouts may offer some cushion against volatility, the company’s results continue to hinge significantly on its execution in higher-margin segments and its progress in offsetting commodity cost pressures and currency-driven competition.

However, investors should not overlook the potential for heightened risk stemming from HP’s elevated ratio of current liabilities to total assets, which...

Read the full narrative on HP (it's free!)

HP's narrative projects $56.4 billion revenue and $3.0 billion earnings by 2028. This requires 1.3% yearly revenue growth and a $0.5 billion earnings increase from $2.5 billion.

Uncover how HP's forecasts yield a $27.21 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community range from US$14.68 up to an outlier of over US$11,139.11. With current liabilities funding 68 percent of HP’s assets, you can see how market views on its risk profile and performance differ sharply, consider these viewpoints as you weigh HP’s evolving story.

Explore 8 other fair value estimates on HP - why the stock might be a potential multi-bagger!

Build Your Own HP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your HP research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free HP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate HP's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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