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Why HP Inc. (HPQ) Is A Strong Value Stock

In today’s investing world, especially among retail investors, searching for growth stocks seems to have become paramount. The rise of tech powers like Facebook FB and Netflix NFLX only furthers this push to find companies that could jump from a small venture-funded firm to a $500 billion behemoth.

Of course, growth investing can be fun and exhilarating, but investors might also consider looking for stocks that present outsized value in this growth-obsessed market.

One company that currently offers investors outstanding bang for their buck is HP Inc. HPQ.

HP, a maker of desktop PCs, printers, laptops, tablets, and other electronic mainstays, is in the midst of a solid run over the last two years. Shares of the company have soared over 44% so far this year, including a 12.25% jump in the last 12 weeks alone.

On top of this, HP is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Value in our Style Scores system, and the consumer electronics power’s Growth and Momentum scores help it earn an overall VGM grade of an “A.”

Now let’s take a look at why HP might be a great play for investors in search of value.

Fundamentals

Many investors will look to the tried and true price to earnings ratio as the first indicator of a company’s value.

HP is currently trading at 12.09x earnings, which marks a discount compared to the “Computer – Mini computers” industry’s average. HP also presents a better value compared to rivals Apple AAPL and Lenovo LNVGY, which sport P/E ratios of 15.64 and 17.85, respectively.

HP also demonstrates why it is currently a strong value play with its great price to sales ratio. The company’s 0.71 P/S ratio marks over a 36% discount compared to its industry’s 1.12 average. And when investors compare HP to Apple’s 3.90 price to sales ratio, the electronics maker looks even better.

HP Inc. PS Ratio (TTM)

HP Inc. PS Ratio (TTM) | HP Inc. Quote

Value investors will also be happy to know that HP currently presents a dividend yield of 2.68%.

Lastly, just so growth-minded investors aren’t scared off too quickly by the notion that HP is only a value investment, the company’s earnings are expected to jump 22% when it reports its fourth-quarter results on Nov. 21—based on our current consensus estimates. What’s more, HP’s revenues are projected to climb nearly 6% to hit $13.25 billion.

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