Expansion drives growth for parent & spinoff

Article Excerpt

On November 1, 2015, the old Hewlett-Packard Co. split into two firms—Hewlett-Packard Enterprise and HP Inc. (see box). For every share they held in the old HP, shareholders received one share in each of the new companies. Investors will only pay capital gains taxes on the new shares when they sell them. Since the split, HP Enterprise is up 23%, while HP Inc. is down 32%. The long-term outlook for both remains bright, but for new buying we currently recommend one. HEWLETT-PACKARD ENTERPRISE CO. $19 (New York symbol HPE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $32.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Average; www. hpe.com) sells computing services and products, such as servers and analytics software, to businesses and governments. In April 2017, the company merged its Enterprise Services business with Computer Sciences Corp. (New York symbol CSC). Enterprise Services supplied 36% of HP Enterprise’s total revenue; it helps corporate clients manage their…