How Is HPE Improving Shareholder Value?



Dividend and buybacks

Hewlett Packard Enterprise (HPE) paid dividends worth $200 million and repurchased shares amounting to $1 billion. In fiscal 2018, the company paid dividends of $600 million in fiscal 2018, while its share repurchases stood at $3.5 billion.

The company returned over $4 billion to shareholders in the form of dividends and share repurchases in fiscal 2018. HPE returned $3.1 billion to shareholders in fiscal 2016 and $3 billion in fiscal 2017. Its capital return program puts it in the top 5% of companies in the S&P 500 in terms of cash returned to shareholders.

HPE has a dividend yield of 3%, amounting to an annualized payout of $0.45 per share. In the last year, HPE has increased its dividend by 18.2%. Peer companies Cisco Systems (CSCO), IBM (IBM), and Juniper Networks (JNPR) have increased their dividends by 2.8%, 5.2%, and 2.5%, respectively.

Article continues below advertisement

EBITDA growth

HPE’s revenue is expected to rise 2.3% to $31.45 billion by fiscal 2021. Comparatively, the company’s EBITDA is expected to rise at a faster rate of 6.9% to $5.62 billion. Its operating profit is also expected to rise 11.7% to $3.06 billion by 2021.

This expansion in HPE’s profit margins will enable it to reinvest resources in research and development, acquisitions, and capital returned to shareholders.


More From Market Realist