Tech giants Hewlett-Packard and Dell are expected to report earnings after the bell Thursday. Which is the better buy for investors? Robert Cihra, tech hardware analyst at Caris & Company, and Michael Holt, equity analyst at Morningstar, shared their insights.
“The clear winner would be HP . And what it really comes down to is diversification away from the PC business,” Holt told CNBC.
“PC's a very challenging business model and Dell relies on the PC business for the majority of its revenue, while HP has a lot of strong business units, and printers and enterprise services and hardware that have greater value for our investors,” he explained.
Holt added that he is not concerned over Mark Hurd stepping downfrom the HP chief executive position.
“The strategy and foundation that Mark Hurd put into place survived his departure,” he said. “The prospect of the business units are what drives the valuations for us, not the CEO.”
Counterpoint: 'Troubling' CEO Void
In the meantime, Cihra said Dell might be a better investment over HP because of lowered expectations.
“I wouldn’t be in a big rush to own either [HP or Dell] as there are better opportunities out there, with more innovative companies like Apple, EMC, IBM — but I would say Dell if I had to choose,” he said.
“The void left by Mark Hurd at HP is quite troubling—HP has shown to be a hard company to manage historically…so the lack of a CEO is a real issue,” Cihra said.
Scorecard—What They Said:
- Cihra's Previous Appearance on CNBC (Jul. 19, 2010)
- Holt's Previous Appearance on CNBC (Aug. 9, 2010)
More Tech Market Views:
- Apple May Still Profit From TV Business: Analyst
- 'Get Ready' for Tech Outperformance: Strong Buys & Trends
- 'Fast Money' Traders Talk Tech
CNBC Data Pages:
Cihra does not own shares of DELL or HPQ.
No immediate information was available for Holt or his firm.