By Rob Otman
Hewlett Packard Enterprise (NYSE: HPE) is a large cap company that operates within the technology hardware, storage and peripherals industry. Its market cap is $32 billion today, and the total one-year return is 46.55% for shareholders.
Hewlett Packard Enterprise stock is beating the market, and it reports earnings next week. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Hewlett Packard Enterprise reported a recent EPS growth rate of 6.67%. That’s below the technology hardware, storage and peripherals industry average of 65.34%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the technology hardware, storage and peripherals industry is 32.99. And Hewlett Packard Enterprise’s ratio comes in at 11.26. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Hewlett Packard Enterprise stock is 50.01%. That’s below the technology hardware, storage and peripherals industry average of 71.56%. The company is less leveraged.
✗ Free Cash Flow per Share Growth: Hewlett Packard Enterprise’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✗ Profit Margins: The profit margin of Hewlett Packard Enterprise comes in at 2.34% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Hewlett Packard Enterprise’s profit margin is below the technology hardware, storage and peripherals average of 4.44%. So that’s a negative indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Hewlett Packard Enterprise is 10.07%, and that’s above its industry average ROE of 5.85%.
Hewlett Packard Enterprise stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here. …read more
Source:: Investment You
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