Hewlett Packard Enterprise

Methodology

HPE's enterprise IT infrastructure business generates relatively stable earnings from servers, storage, and networking equipment with cyclical exposure to corporate IT spending. The company's shift toward as-a-service consumption models improves revenue predictability. This calculation works moderately well, though enterprise IT capital spending cycles and competitive intensity from cloud providers create earnings volatility.

Methodology

HPE typically shows low PEG ratios reflecting concerns about structural headwinds from public cloud adoption reducing on-premise infrastructure demand. The company's transition to GreenLake and edge computing provides growth offsets. A low PEG may represent value if the as-a-service pivot succeeds, or appropriately discount declining relevance of traditional on-premise IT infrastructure.

Methodology

HPE pays a meaningful dividend reflecting the cash-generative nature of legacy IT infrastructure despite growth challenges. The company balances dividends with strategic investments in as-a-service models and debt management. PEGY is relevant for income-focused tech investors, though dividend sustainability depends on successfully transitioning from product sales to recurring revenue models.