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HP Continues to Reward Shareholders with Dividends and Buybacks

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Apr. 3 2018, Published 12:44 p.m. ET

HP rewards shareholders

HP (HPQ) continues to reward its shareholders with dividend payments and share buyback plans. In fiscal 1Q18, HP returned $692 million to shareholders via dividends and share buybacks.

As of March 28, 2018, HP has a dividend yield of 2.6% with an annualized payout of $0.56 per share and a dividend payout ratio of 28.9%. In comparison, Microsoft (MSFT), Western Digital (WDC), Seagate (STX), and IBM (IBM) have dividend yields of 1.9%, 2.2%, 4.5%, and 3.9%, respectively.

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Balance sheet position

HP is one of the top hardware consumer technology companies in the world with a market cap of $38.6 billion. The company finished its 1Q18 with cash and cash equivalents of $5.5 billion compared with nearly $7.0 billion recorded in 1Q17.

The company had long-term debt of $6.3 billion compared with $6.7 billion reported in the last quarter. HP’s net debt was $1.2 billion at the end of 1Q18, which includes approximately $1 billion for funding the acquisition of Samsung’s printer business, popularly called S-Print. In fact, the company expects to regularly return capital to shareholders with a focus on incremental share repurchases.

HP returned $230 million to shareholders via dividends and $462 million via share repurchases in 1Q18, bringing the total capital allocation to shareholders to $692 million.

Cash rewards grew 12.9% YoY (year-over-year) in 1Q18 compared to $613 million returned to shareholders in fiscal 1Q17. In total, the firm also returned $2.3 billion to shareholders in fiscal 2017.

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