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How Did HPE and HPQ Perform in 2016?

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Jan. 10 2017, Published 5:52 p.m. ET

HPE stock rose 54% in 2016

Hewlett-Packard (HPQ) stock rose 30.1% in 2016, while Hewlett Packard Enterprise (HPE) stock rose 54%. In November 2015, Hewlett Packard Enterprise announced its first fiscal 2016 results as an independent company following its split from Hewlett-Packard.

The split was initially announced in October 2014 as part of the company’s five-year plan to turn around its business, which had been hit by the emergence of cloud technology and continued softness in PC (personal computer) shipments. HP focuses on PCs and printers, while Hewlett Packard Enterprise focuses on servers, storage, the cloud, networking, services, and software. Unlike rival IBM (IBM), which is more focused on software, HPE has focused on hardware.

Investors have viewed the split as a positive step, as both companies can now focus on core competencies.

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Dividend yield

The two firms have generated shareholder returns through an increase in share price as well as dividend payments. HPE’s dividend yield stands at 1.1%. In comparison, the dividend yields of HPE peers IBM (IBM), Cisco (CSCO), Microsoft (MSFT), and NetApp (NTAP) stand at 3.6%, 3.3%, 2.6%, and 3%, respectively.

In fiscal 4Q16, HP paid dividends of $0.12 per share, or $0.50 for the year, a 3.6% yield. In comparison, the dividend yields of Apple (AAPL), Western Digital (WDC), Seagate (STX), and Microsoft (MSFT) were 2.1%, 3.3%, 6.5%, and 2.6%, respectively.

HP has stated that it plans to increase its quarterly dividend by 7% YoY (year-over-year) in fiscal 2017.

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