June 28, 2012
The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves discusses topics across the investing world.
Over the next several weeks we'll be looking at each of the components of the Dow Jones Industrial Average and subjecting them to a dividend checkup. Today, we're looking at Hewlett-Packard. Hewlett-Packard is a leading company with a great tradition. Sadly, it's in the midst of a big turnaround led by Meg Whitman. It did raise its dividend recently by 10%, however. Its yield isn't too bad at 2.6%, which compares to the Dow average of around 3% or so. Competitor IBM pays a yield of around 1.8%. And Dell just announced that it'll be paying a dividend for the first time ever later this year. The real story here, of course, is the turnaround. Whitman has already cut a lot of jobs, and has said that the company has a lot of work to do to get back on track. Now that Microsoft will be selling its new tablet, HP will be facing even more competition from another direction. John thinks income investors may want to wait and see on this one, though value investors may possibly see an opportunity here. Personally, he wouldn't invest in this one right now.
Hewlett-Packard, alas, is probably not the best choice for income investors right now. Fortunately, we have some other ideas to suggest. If you're interested in learning more about some outstanding dividend-payers, The Motley Fool has compiled a special free report outlining our top nine dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.