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Does HP Dividend Leave Room for Buybacks?

Both HP Inc. (NYSE: HPQ) and Hewlett Packard Enterprise Co. (NYSE: HPE) declared dividends Thursday morning, the first since the former Hewlett-Packard split into two parts earlier this month.

The board of Hewlett Packard Enterprise authorized a cash dividend for the first quarter of the 2016 fiscal year of 5.5 cents per share. The board of HP authorized a common stock dividend of 12.4 cents. That implies a dividend yield of 1.6% for Hewlett Packard Enterprise and 3.6% for HP, as of Wednesday’s close. Both dividends are payable Jan. 6, 2016, to shareholders of record on Dec. 9.

Wells Fargo’s Maynard Um, has already weighed in and sees plenty of room for share buybacks given what the two companies have outlined for capital returns. He said:

If HPQ returns 75% of its free cash flow (FCF) to investors in F16 (HPQ...


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