{"id":12854403,"date":"2026-01-21T15:41:29","date_gmt":"2026-01-21T20:41:29","guid":{"rendered":"https:\/\/www.philstockworld.com\/?p=12854403"},"modified":"2026-01-21T15:41:29","modified_gmt":"2026-01-21T20:41:29","slug":"psw-top-trade-alert-jan-21st-2026-hp-inc-hpq","status":"publish","type":"post","link":"https:\/\/www.philstockworld.com\/2026\/01\/21\/psw-top-trade-alert-jan-21st-2026-hp-inc-hpq\/","title":{"rendered":"PSW Top Trade Alert &#8211; Jan 21st 2026 &#8211; HP, Inc. (HPQ)"},"content":{"rendered":"<p><strong>\ud83d\udea2 <\/strong>Below $20 with that kind of\u00a0<strong>yield<\/strong>, HPQ is back in \u201cboring\u2011cheap cash\u2011flow machine\u201d territory rather than anything you need to be afraid of. If rn273 wants income and can live with a sluggish PC\/print story while Windows 11 and AI PCs grind through the installed base, this is a perfectly respectable place to park some money and sell premium against.[<a href=\"https:\/\/seekingalpha.com\/article\/4855980-hp-inc-severely-mispriced-cash-flow-powerhouse\" target=\"_blank\" rel=\"nofollow noopener ugc\">seekingalpha<\/a>]\u200b<\/p>\n<p><a href=\"https:\/\/publish.finviz.com\/012126\/HPQd151861127i.png\" target=\"_blank\" rel=\"nofollow noopener noreferrer ugc\"><img decoding=\"async\" src=\"https:\/\/publish.finviz.com\/012126\/HPQd151861127i.png\" alt=\"comment image\" \/><\/a><\/p>\n<h2><strong>Where HPQ actually is now<\/strong><\/h2>\n<ul>\n<li>Price\/yield: Stock recently around\u00a0<strong>$19\u201320<\/strong>, with an annual dividend of about\u00a0<strong>$1.20<\/strong>\u00a0( $0.30 quarterly), which does indeed put the yield in the\u00a0<strong>6\u20136.5%<\/strong>\u00a0neighborhood at today\u2019s quote.[<a href=\"https:\/\/www.dividendmax.com\/united-states\/nyse\/technology-hardware-and-equipment\/hp-inc\/dividends\" target=\"_blank\" rel=\"nofollow noopener ugc\">dividendmax<\/a>]\u200b<\/li>\n<li>Payout &amp; coverage:<\/li>\n<li class=\"ql-indent-1\">Trailing payout ratio ~40% of earnings and under 30% of free cash flow; dividend has 15\u2011year growth history.[<a href=\"https:\/\/stocksguide.com\/en\/dividends\/HP-US40434L1052\" target=\"_blank\" rel=\"nofollow noopener ugc\">stocksguide<\/a>]\u200b<\/li>\n<li class=\"ql-indent-1\">Free cash flow guidance for FY25\u201326 is\u00a0<strong>$2.6\u20133.6B<\/strong>\u00a0a year, versus a market cap that makes the\u00a0<strong>FCF yield ~12\u201314%<\/strong>\u00a0at these prices.[<a href=\"https:\/\/intellectia.ai\/stock\/HPQ\/valuation\" target=\"_blank\" rel=\"nofollow noopener ugc\">intellectia<\/a>]\u200b<\/li>\n<\/ul>\n<p><strong>So this is not a reach\u2011for\u2011yield trap where they\u2019re paying out more than they earn; the cash supports the check.<\/strong><\/p>\n<h2><strong>Business \/ outlook in a sentence<\/strong><\/h2>\n<ul>\n<li>PCs: HP has stacked\u00a0<strong>six consecutive quarters of revenue growth<\/strong>, is gaining share in premium and AI PCs, and sees the Windows 11 refresh plus AI PC penetration (targeting 40\u201350% of shipments by 2026) as ongoing tailwinds, even as unit volumes overall are flattish.[<a href=\"https:\/\/www.hp.com\/us-en\/newsroom\/press-releases\/2025\/hp-inc-reports-fiscal-2025-third-quarter-results.html\" target=\"_blank\" rel=\"nofollow noopener ugc\">hp<\/a>]\u200b<\/li>\n<li>Print: Still the draggy side, but more subscription\/industrial mix and cost savings to defend margins.[<a href=\"https:\/\/www.investing.com\/news\/transcripts\/earnings-call-transcript-hp-inc-beats-q4-2025-earnings-expectations-93CH-4378594\" target=\"_blank\" rel=\"nofollow noopener ugc\">investing<\/a>]\u200b<\/li>\n<li>2026 guidance: Non\u2011GAAP EPS\u00a0<strong>$2.90\u20133.20<\/strong>; at $20 that\u2019s a\u00a0<strong>forward P\/E ~7x<\/strong>, and forward P\/S around\u00a0<strong>0.35\u20130.4x<\/strong>.[<a href=\"https:\/\/www.morningstar.com\/stocks\/xnys\/hpq\/quote\" target=\"_blank\" rel=\"nofollow noopener ugc\">morningstar<\/a>]\u200b<\/li>\n<\/ul>\n<p><strong>That\u2019s exactly the \u201cseverely mispriced cash\u2011flow powerhouse\u201d framing some analysts are using: mid\u2011single\u2011digit top\u2011line, heavy FCF, single\u2011digit P\/E, fat yield.<\/strong>[<a href=\"https:\/\/stockcircle.com\/stocks\/hpq\" target=\"_blank\" rel=\"nofollow noopener ugc\">stockcircle<\/a>]\u200b<\/p>\n<h2><strong>Short answer for rn273<\/strong><\/h2>\n<ul>\n<li>Below $20 with a 6\u2011ish% dividend that\u2019s covered, HPQ is a\u00a0<strong>legit income play<\/strong>, not a value trap\u00a0<em>at these numbers<\/em>.[<a href=\"https:\/\/marketchameleon.com\/Overview\/HPQ\/Dividends\/\" target=\"_blank\" rel=\"nofollow noopener ugc\">marketchameleon<\/a>]\u200b<\/li>\n<li>It fits as:<\/li>\n<li class=\"ql-indent-1\">A\u00a0<strong>cash\u2011flow anchor<\/strong>\u00a0in a conservative sleeve.<\/li>\n<li class=\"ql-indent-1\">A nice candidate for\u00a0<strong>short puts \/ covered calls<\/strong>\u00a0if you want to manufacture 10\u201312% total yield from a business that throws off that much FCF.[<a href=\"https:\/\/advisortools.zacks.com\/proxy\/ResearchReport\/HPQ\/report?d=20260106\" target=\"_blank\" rel=\"nofollow noopener ugc\">advisortools.zacks<\/a>]\u200b<\/li>\n<li>The trade\u2011off is you\u2019re buying a structurally ex\u2011growth PC\/print story that\u2019s being kept attractive by price, buybacks, and capital return\u2014not by some big multiple expansion or AI fantasy.[<a href=\"https:\/\/futurumgroup.com\/insights\/hp-q4-fy-2025-earnings-rise-on-pc-strength-fy-2026-eps-soft\/\" target=\"_blank\" rel=\"nofollow noopener ugc\">futurumgroup<\/a>]\u200b<\/li>\n<\/ul>\n<p>So the answer to \u201cthoughts on HPQ now?\u201d is: at &lt;$20,\u00a0<strong>yes, this is where you get interested<\/strong>, especially if you\u2019re looking for income and option premium rather than a moonshot.<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>The numbers work for HPQ so let\u2019s add it to the $700\/Month Portfolio:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span style=\"color: #0000ff;\"><strong>Buy 15 HPQ 2028 $18 calls for $4.50 ($6,750)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 10 HPQ 2028 $23 calls for $2.70 ($2,700)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 5 HPQ April $20 calls for $1.35 ($675)<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>That\u2019s net $3,375 on the $5,000 spread and we used 86 of 730 days so 7 more chances to sell $675 is $4,725 (140%) and $1,625 (48%) upside potential on the spread itself is a nice trade! Also, don\u2019t forget, the basis will drop 3x $675 ($2,025) so 2\/3 of the money is back in our pocket (and working) by the end of year one!<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>For the LTP:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span style=\"color: #0000ff;\"><strong>Sell 30 2028 $20 puts for $4.70 ($14,100)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Buy 50 2028 $15 calls for $6 ($30,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 30 2028 $23 calls for $2.70 ($8,100)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 25 April $20 calls for $1.35 ($3,375)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 20 April $19 puts for $1.40 ($2,800)<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>A bit more aggressive at net $1,625 on the $40,000 spread that\u2019s $22,000 in the money with $38,375 (2,361%) upside potential. As in the $700\/Month Portfolio, we have 7 more chances to sell $6,175 so that\u2019s $43,225 (2,660%), which is more than the actual spread!<\/strong><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>THAT is the difference between a margin and non-margin play and, if you are going to sell a lot of puts \u2013 do it on a stock that\u2019s trading at 6x earnings, right?<\/strong><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>Again, not rocket science\u2026<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udea2 Below $20 with that kind of\u00a0yield, HPQ is back in \u201cboring\u2011cheap cash\u2011flow machine\u201d territory rather than anything you need to be afraid of. If rn273 wants income and can live with a sluggish PC\/print story while Windows 11 and AI PCs grind through the installed base, this is a perfectly respectable place to park [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":12854404,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26305],"tags":[],"class_list":{"0":"post-12854403","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-trades"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12854403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12854403"}],"version-history":[{"count":1,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12854403\/revisions"}],"predecessor-version":[{"id":12854405,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12854403\/revisions\/12854405"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12854404"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12854403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12854403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12854403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}