Seagate Technology Holdings PLC (STX): A Deep Dive into Its Dividend Performance
A comprehensive analysis of STX's dividend history, yield, growth rates, and future sustainability
Seagate Technology Holdings PLC (NASDAQ:STX) recently announced a dividend of $0.7 per share, payable on 2023-10-10, with the ex-dividend date set for 2023-09-25. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Seagate Technology Holdings PLC's dividend performance and assess its sustainability.
Understanding Seagate Technology Holdings PLC
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Seagate is a leading supplier of hard disk drives for data storage to the enterprise and consumer markets. It forms a practical duopoly in the market with its chief rival, Western Digital; they are both vertically integrated.
A Look at Seagate Technology Holdings PLC's Dividend History
Seagate Technology Holdings PLC has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Seagate Technology Holdings PLC has increased its dividend each year since 2011, earning it the status of a dividend achiever.
Breaking Down Seagate Technology Holdings PLC's Dividend Yield and Growth
As of today, Seagate Technology Holdings PLC currently has a 12-month trailing dividend yield of 4.25% and a 12-month forward dividend yield of 4.25%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Seagate Technology Holdings PLC's annual dividend growth rate was 2.80%. Extended to a five-year horizon, this rate decreased to 2.40% per year. Over the past decade, Seagate Technology Holdings PLC's annual dividends per share growth rate stands at 6.00%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Seagate Technology Holdings PLC's dividend payout ratio is 0.00.
Seagate Technology Holdings PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Seagate Technology Holdings PLC's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Future Outlook: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Seagate Technology Holdings PLC's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Seagate Technology Holdings PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Seagate Technology Holdings PLC's revenue has increased by approximately -3.50% per year on average, a rate that underperforms than approximately 71.92% of global competitors.
Conclusion: Seagate Technology Holdings PLC's Dividend Outlook
Seagate Technology Holdings PLC has demonstrated a consistent dividend payment record and a reasonable growth rate. Despite a zero payout ratio and a profitability rank of 7 out of 10, the company's revenue growth rate lags behind 71.92% of global competitors. Therefore, while the company's dividends appear sustainable in the short term, investors should monitor its revenue growth and profitability closely for long-term dividend sustainability.
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This article first appeared on GuruFocus.
