Hewlett Packard Enterprise Company (NYSE: HPE) is a large-cap stock that may be a safe option for investors looking to preserve capital in a volatile market. The company has a diversified income stream and attractive capital returns, making it an appealing choice for risk-averse portfolios. However, the financial health of a company is crucial in determining its success moving forward.
In the past year, HPE has reduced its debt from $14 billion to $13 billion, with current cash and short-term investments totaling $3.8 billion. The company has generated $3.2 billion in cash from operations, leading to an operating cash to total debt ratio of 26%, indicating that HPE’s operating cash is enough to cover its debt.
With current liabilities of $16 billion and current assets of $15 billion, HPE has a current ratio of 0.94 times. This suggests that the company may struggle to meet its short-term obligations. HPE has a debt-to-equity ratio of 68%, which is considered above average. However, large-cap companies like HPE often take on more debt as it is less costly than equity.
HPE’s interest coverage ratio of 4.88x indicates that the company can comfortably cover its interest payments. This, along with its high cash coverage, suggests that HPE is efficiently using its debt to generate cash flow. However, concerns about the company’s liquidity raise questions about its current asset management practices.
Investors should conduct further research on HPE to gain a deeper understanding of the stock. This includes analyzing industry analysts’ predictions for future growth, determining the stock’s intrinsic value, and exploring other high-yield stocks in comparison to HPE. It is important to consider all factors before making an investment decision.
Overall, while HPE may be a safe investment due to its financial strength and high cash coverage, investors should continue to monitor the company’s performance and conduct thorough research before investing. This article serves as a starting point for further analysis and does not constitute a recommendation to buy or sell shares.
Article Source
https://nz.news.yahoo.com/finance/news/investors-know-hewlett-packard-enterprise-190005150.html