Here’s a technology-stock pick that’s totally out of left field, but it could be a major wealth builder. I’m talking about Hewlett Packard Enterprise (NYSE:HPE), a fast mover in the areas of cloud computing and supercomputers. Soon enough, Hewlett Packard Enterprise stock could be the market’s next multibagger that nobody saw coming.
Just to be clear, the electronics producer formerly known as Hewlett-Packard split in late 2015 into two separate businesses. This “enterprise” company provides technology solutions primarily for businesses. In contrast, HP (NYSE:HPQ) mainly sells personal computers and printers.
Hewlett Packard Enterprise isn’t a Magnificent Seven member, but as we’ll see, the company offers magnificent value to its shareholders. So, let’s jump right in and see what this underappreciated technology firm has been up to lately.
Hewlett Packard Enterprise: A Supercomputer Superstar
Unlike HP, Hewlett Packard Enterprise isn’t heavily affected by the ups and downs of the PC market. As long as there’s a demand for cloud storage, Hewlett Packard Enterprise should be positioned to generate robust revenue.
On that topic, Hewlett Packard Enterprise recently unveiled HPE GreenLake Block Storage for Amazon’s (NASDAQ:AMZN) Amazon Web Services. Hewlett Packard Enterprise describes this service as “a new software-defined storage offering to manage block storage across hybrid cloud environments.”
Working with the almighty Amazon is great, and the only thing that might be better is partnering with the U.S. government. Specifically, Hewlett Packard Enterprise recently delivered a supercomputer to the U.S. Department of Energy.
It’s not the first time Hewlett Packard Enterprise has delivered a supercomputer to the Energy Department. However, this new supercomputer could make the older ones instantly obsolete. As Hewlett Packard Enterprise explains, it’s the “largest deployment of open, Ethernet-based supercomputing interconnect – HPE Slingshot – on a single system.”
Hewlett Packard Enterprise Delivers Supreme Value
Some Magnificent Seven companies are richly valued and offer a small dividend or no dividend at all. An example would be Amazon, which doesn’t pay a dividend and has a GAAP-measured trailing 12-month price-to-earnings ratio of 51.53x.
In contrast, Hewlett Packard Enterprise has a P/E ratio of just 12.32x. So, as long as HPE stock is under $20 per share, I’d say it’s a bargain. I’m not saying that you shouldn’t buy Amazon stock. Rather, I’m only suggesting that you might want to expand your horizons beyond the Magnificent Seven.
In addition, Hewlett Packard Enterprise offers a forward annual dividend yield of 2.83%, which easily exceeds the technology-sector average yield of 1.025%. Moreover, Hewlett Packard Enterprise’s dividends appear to be quite safe.
The company is consistently profitable and has a good track record of beating analysts’ consensus quarterly EPS forecasts.
Hewlett Packard Enterprise Stock: A Great Deal From Left Field
Chances are, you didn’t expect Hewlett Packard Enterprise to be such a strong contender among top-tier technology firms. Truly, Hewlett Packard Enterprise has what it takes to compete successfully in the fields of cloud storage and supercomputers in the coming quarters.
Besides, Hewlett Packard Enterprise shares aren’t overpriced at all, and the company rewards its investors with generous quarterly dividends. Therefore, I encourage you to add Hewlett Packard Enterprise stock to your portfolio while it’s still a relatively undiscovered tech-market pick.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
