Do HP’s Dividends Make Up For A Lagging Stock

HP Inc. (HPQ) sells PCs and printers and returns cash directly to shareholders. Executives say they remain committed to returning approximately 100% of free cash flow to investors over time. In fiscal Q3 2026, HP returned nearly $600 million through dividends and share repurchases, about 37% of the $1.6 billion of free cash flow it generated in the quarter. Yet the share price has trailed the broader market for years. So what would you guess a holder made over five years, including every dividend?

How Far Has HP Stock Trailed The Market?

Over the five years ending October 12, 2026, HP stock gained 6.4% on price alone. The S&P 500 climbed 81.5% during the same stretch. That divergence leaves HP 75.2 percentage points behind the market.

An investor tracking only the share price captured almost none of the market's five-year advance.

How Much Did HP's Dividends Add?

HP's dividends added 22.1 percentage points over those five years. With dividends reinvested, the stock returned 28.4%.

Most of the value an HP shareholder collected came from these distributions, leaving only a small fraction tied to the actual share price.

Did The Dividends Close The Gap For HP Holders?

These dividends closed only a small part of the performance gap with the market, as the table below details.

HP paid a heavier dividend than the broader market. The S&P 500 pays dividends as well, however, and those distributions added 12.1 percentage points to its five-year return. With dividends, the S&P 500 returned 93.6%, leaving HP 65.2 percentage points behind. Ultimately, HP's dividends narrowed the deficit by 10 percentage points and left the rest of the gap intact.

What This Means If You Own HP For Income

Income-focused shareholders extracted more cash from HP but sacrificed the bulk of the market's growth. Over the past twelve months, HP's dividends added 5.6 percentage points to its return, compared with 1.0 for the S&P 500's dividends. This extra income is real. Over a five-year horizon, however, it came nowhere near offsetting the capital appreciation that an HP investor missed.

PCs and printers generate the cash required to fund these payouts. The company's PC segment, Personal Systems, generated 70% of revenue in fiscal 2025, and Printing accounted for the remaining 30%. During the fiscal Q3 2026 earnings call, executives indicated they plan to keep returning free cash flow to shareholders while HP's gross leverage, a measure of debt, stays under 2x.

For an income investor, HP's total return with dividends measured against the S&P 500's return with dividends is the true benchmark to monitor, rather than the yield alone.

How To Act On HPQ?

Now you know HPQ better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.

There is a smarter choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking.

If you'd rather act on HPQ itself:

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