Seagate Technology Holdings PLC's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of STX
Seagate Technology Holdings PLC (NASDAQ:STX) recently announced a dividend of $0.7 per share, payable on 2024-04-04, with the ex-dividend date set for 2024-03-20. 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 look into Seagate Technology Holdings PLC's dividend performance and assess its sustainability.
What Does Seagate Technology Holdings PLC Do?
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Seagate Technology Holdings PLC 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 Glimpse 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. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
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 3.29% and a 12-month forward dividend yield of 3.29%. 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. And over the past decade, Seagate Technology Holdings PLC's annual dividends per share growth rate stands at 6.00%.
Based on Seagate Technology Holdings PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Seagate Technology Holdings PLC stock as of today is approximately 3.70%.
The Sustainability Question: 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 2023-12-31, 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 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
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 approximately 69.87% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Seagate Technology Holdings PLC's earnings increased by approximately -64.10% per year on average, a rate that underperforms approximately 96.49% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -35.20%, which underperforms approximately 96.87% of global competitors.
Next Steps
In conclusion, while Seagate Technology Holdings PLC has a history of consistent dividend payments and a respectable dividend yield, the company's recent growth metrics present a mixed picture. The negative growth rates in revenue per share, EPS, and EBITDA over the past few years could raise concerns regarding the long-term sustainability of Seagate Technology Holdings PLC's dividend growth. However, the company's solid profitability rank and zero payout ratio as of the last reported date suggest that it still has the financial flexibility to maintain its dividend in the near term. Value investors should monitor Seagate Technology Holdings PLC's future earnings reports and growth metrics closely to better understand the potential impact on the company's dividend sustainability and overall financial health. For those seeking income-generating investments, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
