uploads///

How Hewlett-Packard Enterprise Is Increasing Shareholder Value

By

Nov. 30 2016, Updated 8:04 a.m. ET

Share repurchases and dividends

Hewlett-Packard Enterprise (HPE) returned over $92 million in cash to shareholders in the last fiscal quarter. In fiscal 2016, HPE returned $3 billion in capital to its shareholders, including $2.7 billion in share repurchases.

During the company’s fiscal 4Q16 earnings call, chief financial officer Tim Stonesifer said, “As part of our continued efforts to return capital to shareholders, we increased our dividend payment by 18% to $0.065 per share effective for the January 4, 2017 payment.”

Article continues below advertisement

HPE’s board of directors has increased its share repurchase authorization by $3 billion. The repurchase program now stands at $4.8 billion. HPE’s dividend yield stands at 1.1%. In comparison, the dividend yields of HPE’s peers IBM (IBM), Cisco (CSCO), Microsoft (MSFT), and NetApp (NTAP) stand at 3.6%, 3.3%, 2.6%, and 3%, respectively.

Improvement in profit margins

In fiscal 4Q16, HPE’s gross margin expanded 80 basis points YoY (year-over-year) to 30.4%, driven by improvements in its Enterprise Services and Enterprise Group segments. Its non-GAAP (generally accepted accounting principles) operating profit rose 150 basis points YoY to 11.1%. As seen in the above chart, HPE’s operating margin was 9.6% in fiscal 4Q15 and 8.8% in fiscal 3Q16.

According to HPE, improvements in profit margins were driven by location mix and new deal profitability, coupled with cost improvements and streamlining efforts.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.