How Did HP Inc. Increase Shareholder Value in Fiscal 2018?



Revenue and earnings growth

So far, we’ve seen that HP Inc.’s (HPQ) revenue and earnings rose at a robust pace in fiscal 2018. The company has reported double-digit year-over-year growth in the last five consecutive quarters.

HP has also managed to outperform the global PC market on a consistent basis. In the fourth quarter, HP’s number of Personal Systems units sold rose 6%, and its total sales rose 11%.

HP’s sales rose 7% in the Americas, 17% in the EMEA (Europe, the Middle East, and Africa) region, and 16% in the Asia-Pacific region during the fourth quarter of fiscal 2018. The encouraging revenue growth and cash flow resulted in significant payouts for investors in the form of dividends and share buybacks.

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Dividends and buybacks

In fiscal 2018, HP paid $899 million to shareholders in the form of dividends and bought back shares worth $2.55 billion, bringing its total payout to $3.5 billion—52% higher than the $2.3 billion it returned in fiscal 2017.

In the fourth quarter, HP paid $219 million in dividends and repurchased shares worth $598 million. Its total payout was $817 million, 13% higher than its payout of $722 million in the fourth quarter of fiscal 2017.

HP has a dividend yield of 2.8%, or $0.64 per share. HP has increased its dividend yield 7% in the last year. Peer hardware companies Western Digital (WDC), Seagate (STX), and Apple have dividend yields of 4.4%, 5.9%, and 1.6%, respectively.


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