Change Is Starting To Take Hold At Hewlett Packard Company (HPQ): International Business Machines Corp. (IBM)

Along the way, International Business Machines Corp. (NYSE:IBM) even sold off its computer business to Lenovo, which investors viewed very positively because of the strength of the software and services business. Of course, IBM’s stock may be a little too pricey at current levels, hovering around $200 a share.

Unfortunately, HP has proven that its execution simply isn’t as good as IBM’s. However, with a solid base, the company has time to get its act together. And with a new CEO and hints of improvement, it may be time to rethink the company’s long-term prospects. For IBM shareholders, it might even be worth pulling some profits out of Big Blue and investing in the HP way.

While Hewlett Packard Company (NYSE:HPQ) may never be able to take on International Business Machines Corp. (NYSE:IBM) in a head to head fight, it will likely be an important contender. Moreover, it also isn’t the only technology company to take on internal problems and survive.

For example, CA, formerly known as Computer Associates, is another tech company that has shifted over the years to a services-oriented business. Its transition wasn’t exactly smooth, but the big problem wasn’t the business–it was the executive suite. There were accusations of fraud, and a former CEO was even sentenced to jail time.

While this distraction was going on, some customers were questioning the company’s product offerings. Despite these issues, CA has managed to come back from its struggles a stronger company. The company’s top line has been growing consistently over the past decade, albeit at a relatively slow pace, with improved profitability helping to push the bottom line higher.

Continued slow but steady growth is likely from here, which could make CA a good candidate for more conservative investors, since an HP turnaround isn’t a guarantee. A near 4% dividend is also a compelling draw.

Give a CEO a Chance

Whitman is a top notch CEO and she seems to be turning things around at Hewlett Packard Company (NYSE:HPQ). While the shares have jumped over 10% on solid results, there’s still time to get in on this industry giant in transition. It won’t be the next International Business Machines Corp. (NYSE:IBM), but it might be close enough for notable share price gains.

The article Change Is Starting To Take Hold At This Company originally appeared on Fool.com and is written by Reuben Gregg Brewer.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.