Ten years after its separation from HP Enterprise, the maker of computers, printers and ink cartridges may hold an unusual distinction: it could be the cheapest sizable company on the US market.
The math is straightforward. From 2016 to 2025, HP earned roughly $3bn a year on average. That figure is already conservative. Pandemic demand briefly flattered results and has been toned down in the arithmetic.
Over the decade the group generated $34bn in free cash flow. Almost all of it went back to shareholders through dividends and buybacks. The share count, unsurprisingly, has been almost cut in half. Students of “cannibal” companies may want to pause here.
Admittedly, growth has never been the story. Revenue rose from $48bn in 2016 to $55bn last year, after briefly peaking at $63bn in the pandemic boom. But what the business lacks in excitement, it compensates with consistency: profits every year, no real mishaps.
The balance sheet is hardly stretched. Net debt amounts to less than two years of EBITDA. Meanwhile roughly three quarters of revenue comes from professional and corporate clients — a customer base that tends to replace equipment whether the economy feels strong or not.
Yet the market values HP at barely six times its average earnings, with the entire company worth only about $18bn. Investors collecting the dividend receive more than 6 per cent a year, while management continues to retire shares at what are distinctly attractive prices.
Perhaps investors see dangers. Tariffs, memory price inflation, the recent departure of its chief executive to PayPal, and pressure on discretionary spending have darkened the mood. All fair points, and none trivial. But HP has navigated weak PC cycles before.
If there is a genuine disappointment, it lies in the poor M&A record. Roughly $4bn spent on acquisitions appears to have produced zero improvement in operating profit. Capital allocation, it seems, is best left to the buyback desk.
Benjamin Graham once remarked that the ideal investment is one where future earnings are reasonably assured by an established competitive position. In keeping with its past decade as a standalone company, HP last week guided for essentially unchanged earnings in 2026.
For a company priced like a melting ice cube, the cube shows little sign of melting.