How HPE Is Continuing to Improve Shareholder Value



Over $860 million distributed in fiscal 1Q18

Hewlett Packard Enterprise (HPE) paid $120 million via dividends and $742 million via share repurchases to its shareholders in fiscal 1Q18. HPE expects to return $7 billion to its shareholders in the form of dividends and share repurchases between fiscal 2018 and fiscal 2019. It also expects to increase its quarterly dividend by 50% in fiscal 3Q18 and make share repurchases of ~$5.5 billion by the end of fiscal 2019.

HPE’s chief financial officer, Tim Stonesifer, stated, “The buyback will be more weighted to fiscal year ’18 but we will repurchase shares in an efficient manner so that timing may not be linear. As always, we will continue to use our ROI based capital allocation framework.”

HPE has a dividend yield of 1.7% and an annualized payout of $0.30, indicating a payout ratio of 22%. In comparison, the dividend yields of IBM (IBM), NetApp (NTAP), Microsoft (MSFT), and Cisco (CSCO) stand at 4%, 1.4%, 1.8%, and 3%, respectively.

Article continues below advertisement

Research and development

HPE increased its R&D (research and development) expenses by 9% YoY (year-over-year) to $388 million in fiscal 1Q18 from $356 million in fiscal 1Q17. HPE has also stated that it will continue to take a disciplined approach to future mergers and acquisitions that are expected to drive its revenue growth and shareholder value.


More From Market Realist