Financial Survey: Lenovo Group (OTCMKTS:LNVGY) & Hewlett Packard Enterprise (NYSE:HPE)

Hewlett Packard Enterprise (NYSE:HPE) and Lenovo Group (OTCMKTS:LNVGY) are both large-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility & Risk

Hewlett Packard Enterprise has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Lenovo Group has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Institutional and Insider Ownership

80.8% of Hewlett Packard Enterprise shares are owned by institutional investors. Comparatively, 0.1% of Lenovo Group shares are owned by institutional investors. 0.4% of Hewlett Packard Enterprise shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Hewlett Packard Enterprise and Lenovo Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hewlett Packard Enterprise	$34.30 billion	2.16	$57.00 million	$1.92	29.06
Lenovo Group	$83.08 billion	0.54	$1.91 billion	$1.03	68.05

Lenovo Group has higher revenue and earnings than Hewlett Packard Enterprise. Hewlett Packard Enterprise is trading at a lower price-to-earnings ratio than Lenovo Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Hewlett Packard Enterprise and Lenovo Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hewlett Packard Enterprise	0	8	10	2	2.70
Lenovo Group	0	1	0	1	3.00

Hewlett Packard Enterprise presently has a consensus target price of $65.44, indicating a potential upside of 17.29%. Given Hewlett Packard Enterprise’s higher probable upside, equities research analysts plainly believe Hewlett Packard Enterprise is more favorable than Lenovo Group.

Profitability

This table compares Hewlett Packard Enterprise and Lenovo Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hewlett Packard Enterprise	6.60%	15.50%	5.00%
Lenovo Group	0.88%	34.24%	4.76%

Dividends

Hewlett Packard Enterprise pays an annual dividend of $0.57 per share and has a dividend yield of 1.0%. Lenovo Group pays an annual dividend of $1.68 per share and has a dividend yield of 2.4%. Hewlett Packard Enterprise pays out 29.7% of its earnings in the form of a dividend. Lenovo Group pays out 163.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hewlett Packard Enterprise has increased its dividend for 2 consecutive years.

Summary

Hewlett Packard Enterprise beats Lenovo Group on 12 of the 18 factors compared between the two stocks.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It operates in six segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments and Other. The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE Synergy; HPE Alletra, HPE GreenLake, Zerto, HPE InfoSight, and HPE CloudPhysics storage products; HPE Cray EX, HPE Cray XD, and converged edge systems; and HPE Superdome Flex, HPE Nonstop, and HPE Integrity products. It also provides HPE Aruba products that includes hardware products, such as Wi-Fi access points, switches, and gateways; HPE Aruba Networking software and services comprising cloud-based management, network management and access control, analytics and assurance, software-defined wide-area networking, network security, analytics and assurance, and location services software; and professional and support services, as well as as-a-service and consumption models. In addition, the company offers leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of various IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others; consultative-led services; HPE Ezmeral Container Platform; HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; OpsRamp; and Hewlett Packard Labs. It serves commercial and large enterprise groups, such as business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. The company was founded in 1939 and is headquartered in Spring, Texas.

About Lenovo Group

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. In addition, it provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. Further, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Additionally, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Furthermore, the company distributes smartphone, tablet, server, and storage. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is headquartered in Quarry Bay, Hong Kong.