Should Investors Buy HP Stock Before Dividend Payout Deadline?

Year-over-year, HPQ sports a 42% lead

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The shares of HP Inc. (NYSE:HPQ) are up 0.7% at $35.45 at last check, after the tech concern declared a cash dividend of 25 cents per share on its common stock earlier this month, placing its forward dividend at $1, and its dividend yield at 2.84%. Dividends will be payable on April 6 to shareholders of record as of March 9.

The security bounced off the $33 area and 80-day moving average to find a floor at the $35 mark. Prior to today's move higher, the equity had been pulling back from a Jan. 12, record high of $39.65. Now looking to snap a two-day losing streak, HPQ sports a 42% year-over-year lead.

HPQ 80 Day

A shift in sentiment could help HPQ erase more of its recent losses. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HPQ sports a 10-day put/call volume ratio of 1.11, which sits higher than 70% of annual readings. This implies puts have rarely been more popular in the past two weeks. 

It is also worth noting the security's Schaeffer's Volatility Scorecard (SVS) sits at 89 out of 100. This means HP stock has exceeded options traders' volatility expectations during the past year.

Moreover, HPQ trades at price-earnings ratio of 6.67 and a price-sales ratio of 0.68, which are both very attractive valuations. The equity has also maintained an overall positive trajectory on top and bottom lines, despite a lack of consistency. HPQ grew revenues and net income 8.6% and 22%, respectively, since 2018.

However, HP stock saw a 4% decrease in revenues between 2019 and 2020, and a 47% drop in net income between 2018 and 2020. HPQ is projected to deliver a 5.3% jump in earnings, and a 0.6% decrease in revenues in 2022, continuing its pattern of inconsistency. Nonetheless, the security offers a viable long-term option for value and dividend investors.


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