Spinoff spotlight: HP Inc.

Article Excerpt

HP INC. $39 is a hold. The company (New York symbol HPQ; Manufacturing sector; Shares outstanding: 1.05 billion; Market cap: $41.0 billion; Dividend yield: 2.6%; Takeover Target Rating: Medium; www.hp.com) took its current form on November 1, 2015, when the old Hewlett-Packard Co. split into two firms—HP Inc. (personal computers and printers) and Hewlett-Packard Enterprise (computing products and services for businesses). For every share they held in the old HP, investors received one share in each of the new firms. HP is now buying Plantronics Inc. (New York symbol POLY) for $3.3 billion. That firm makes videoconferencing products such as cameras and headsets. The company expects the market for videoconferencing equipment will triple by 2024 as businesses upgrade their premises to handle remote meetings. The stock jumped 15% recently after Warren Buffett’s Berkshire Hathaway Inc. announced it now owns roughly 11% of HP. Even so, it’s unlikely Berkshire will launch a full takeover offer anytime soon. Moreover, ongoing shortages of computer chips will continue to hold…