Assessing the Sustainability of Hewlett Packard Enterprise Co's Dividend Payments
Hewlett Packard Enterprise Co (HPE, Financial) recently announced a dividend of $0.13 per share, payable on 2024-01-11, with the ex-dividend date set for 2023-12-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Hewlett Packard Enterprise Co's dividend performance and assess its sustainability.
What Does Hewlett Packard Enterprise Co Do?
Hewlett Packard Enterprise is an information technology vendor that provides hardware and software to enterprises. Its primary product lines are compute servers, storage arrays, and networking equipment; it also has a high-performance computing business. HPE's stated goal is to be a complete edge-to-cloud company, and its portfolio enables hybrid clouds and hyperconverged infrastructure. It uses a primarily outsourced manufacturing model and employs 60,000 people worldwide.
A Glimpse at Hewlett Packard Enterprise Co's Dividend History
Hewlett Packard Enterprise Co has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Hewlett Packard Enterprise Co's Dividend Yield and Growth
As of today, Hewlett Packard Enterprise Co currently has a 12-month trailing dividend yield of 2.96% and a 12-month forward dividend yield of 3.21%. This suggests an expectation of increased dividend payments over the next 12 months. Extended to a five-year horizon, this rate increased to 4.20% per year. Based on Hewlett Packard Enterprise Co's dividend yield and five-year growth rate, the 5-year yield on cost of Hewlett Packard Enterprise Co stock as of today is approximately 3.64%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-10-31, Hewlett Packard Enterprise Co's dividend payout ratio is 0.31. Hewlett Packard Enterprise Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hewlett Packard Enterprise Co's profitability 7 out of 10 as of 2023-10-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Hewlett Packard Enterprise Co's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Hewlett Packard Enterprise Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Hewlett Packard Enterprise Co's revenue has increased by approximately 2.00% per year on average, a rate that underperforms approximately 57.73% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Hewlett Packard Enterprise Co's earnings increased by approximately 37.20% per year on average, a rate that underperforms approximately 23.51% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.70%, which underperforms approximately 49.92% of global competitors.
Conclusion: Dividend Prospects of Hewlett Packard Enterprise Co
In conclusion, Hewlett Packard Enterprise Co's consistent dividend history, alongside a moderate payout ratio and good profitability rank, paints a picture of a company committed to rewarding shareholders. While the growth metrics indicate areas where HPE may lag behind some competitors, the overall growth rank and dividend yield suggest a positive outlook for dividend sustainability. Value investors considering HPE for its dividend prospects should weigh these factors and monitor the company's performance closely. Can Hewlett Packard Enterprise Co continue to deliver shareholder value in the form of consistent dividends amidst the dynamic tech landscape? For further insights, GuruFocus Premium users can utilize the High Dividend Yield Screener to find more high-dividend yield stocks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
