PC maker Hewlett-Packard Company (
) announced late Wednesday that it would buy struggling smartphone
maker Palm Inc. (
) for around $1.2 billion.
H-P will pay $5.70 in cash for each share of Palm stock, which
represents a 23% premium of its Wednesday closing price of
The boards of both companies have approved the deal, which is
expected to close by the end of July. H-P said it plans to "invest
heavily" in Palm, in an attempt to make a dent in the smartphone
market, which is currently dominated by Apple (
) and Research in Motion (
Hewlett-Packard shares fell 28 cents, or -0.5%, in premarket
The Bottom Line
We had removed shares of HPQ from our "recommended" list back on
Oct.1, when the stock was trading at $47.21. The company has a .60%
dividend yield, based on last night's closing stock price of
$53.28. The stock has technical support in the $47-$50 price area.
If the shares can firm up, we see overhead resistance around the
$56-$57 price levels. We would remain on the sidelines for now.
Hewlett-Packard Company (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
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