By Simply Wall St
Publication Date: 2025-12-08 18:44:00
the board of Company Hewlett Packard Enterprise (New York Stock Exchange: HPE) has announced that it will pay its dividend of $0.1425 on January 16, a larger payment than last year’s comparable dividend. This brings the dividend yield to 2.4%, which will please shareholders.
Impressive dividend yields are nice, but this doesn’t matter much if the payments can’t be sustained. Hewlett Packard Enterprise is not profitable despite paying a dividend and is paying out 120% of its free cash flow. This is a pretty strong warning sign that the dividend may not be sustainable.
Over the next year, EPS is expected to grow by 139.9%. Assuming the dividend continues recent trends, we think the payout ratio could become very high, which probably can’t continue without starting to put some pressure on the balance sheet.