Hewlett Packard Rewards Shareholders With 50% Dividend Hike

Hewlett Packard Enterprise Company’s HPE board of directors recently announced regular quarterly cash dividend of 11.25 cents per share to be payable on Jul 4 to the shareholders of record date as of June 13. The new dividend reflects an increase of a whopping 50% from the previous payment of 7.5 cents per share.

This will mark the company’s third quarterly dividend payment in fiscal 2018. Prior to this, it had paid dividend in December 2017 and March 2018.

The robust hike in dividend is believed to be in line with Hewlett Packard’s latest capital-return policy. It should be noted that during the first-quarter fiscal 2018 earnings conference call, the company had stated that it would return $7 billion to shareholders by fiscal 2019 through share buybacks and dividend payments. Of this, it is expected that Hewlett Packard will return at least half of the amount in the current fiscal.

Notably, during fiscal 2017, Hewlett Packard returned $3 billion to its shareholders, of which $2.56 billion was through share repurchases and the remaining through dividend payments. Continuing the same, the company, during the last reported quarter, returned $862 million to shareholders, of which $742 million was through share repurchases and the remaining through dividend payments.

The company’s strong balance sheet and cash flow provides it with the financial flexibility to undertake shareholder-friendly initiatives, and scope for product innovation, acquisitions and expansion into newer markets. The company ended the fiscal first quarter with cash and cash equivalents of nearly $7.7 billion.

Some other companies that have a consistent track record of returning value through share repurchases and dividend payments include The Boeing Company BA, Cisco Systems Inc. CSCO and Accenture plc ACN.

We believe such initiatives not only enhance shareholder return but also raise the market value of a stock. Through share repurchases and dividend payouts, companies boost investors’ confidence, persuading them to either buy or hold the scrip. Looking ahead, Hewlett Packard remains confident on its growth potential, thereby raising hope for further increase in shareholder value.

Notably, Hewlett Packard has outperformed its industry in the year-to-date period. The stock has appreciated 19.8%, while the industry recorded growth of 3.1% during the same time frame.

 

Currently, Hewlett Packard has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
Accenture PLC (ACN) : Free Stock Analysis Report
 
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