Seagate Technology (NASDAQ: STX) and Western Digital (NASDAQ:WDC) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.
Insider & Institutional Ownership
86.8% of Seagate Technology shares are owned by institutional investors. Comparatively, 85.7% of Western Digital shares are owned by institutional investors. 0.9% of Seagate Technology shares are owned by company insiders. Comparatively, 0.3% of Western Digital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and price targets for Seagate Technology and Western Digital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Seagate Technology presently has a consensus price target of $52.86, suggesting a potential downside of 10.44%. Western Digital has a consensus price target of $112.15, suggesting a potential upside of 29.63%. Given Western Digital’s stronger consensus rating and higher possible upside, analysts plainly believe Western Digital is more favorable than Seagate Technology.
Seagate Technology pays an annual dividend of $2.52 per share and has a dividend yield of 4.3%. Western Digital pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Seagate Technology pays out 61.2% of its earnings in the form of a dividend. Western Digital pays out 25.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Risk & Volatility
Seagate Technology has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500. Comparatively, Western Digital has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.
Earnings and Valuation
This table compares Seagate Technology and Western Digital’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Seagate Technology||$10.77 billion||1.57||$772.00 million||$4.12||14.33|
|Western Digital||$19.09 billion||1.36||$397.00 million||$7.90||10.95|
Seagate Technology has higher earnings, but lower revenue than Western Digital. Western Digital is trading at a lower price-to-earnings ratio than Seagate Technology, indicating that it is currently the more affordable of the two stocks.
This table compares Seagate Technology and Western Digital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Seagate Technology beats Western Digital on 10 of the 16 factors compared between the two stocks.
About Seagate Technology
Seagate Technology plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. The company manufactures and distributes hard disk drives, solid state drives and their related controllers, solid state hybrid drives, and storage subsystems. Its products are used in enterprise servers and storage systems applications; client compute applications, primarily for desktop and mobile computing; and client non-compute applications, including various end user devices, such as portable external storage systems, surveillance systems, network-attached storage, digital video recorders, and gaming consoles. The company offers external backup storage solutions under the Backup Plus and Expansion product lines, as well as under the Maxtor and LaCie brand names available in capacities up to 120 terabytes. It sells its products primarily to original equipment manufacturers, distributors, and retailers. Seagate Technology plc was founded in 1979 and is headquartered in Dublin, Ireland.
About Western Digital
Western Digital Corporation, together with its subsidiaries, develops, manufactures, and sells data storage devices and solutions worldwide. It offers performance hard disk drives (HDDs) that are used in enterprise servers, data analysis, and other enterprise applications; capacity HDDs and drive configurations for use in data storage systems and tiered storage models; and enterprise solid state drives (SSDs), including NAND-flash SSDs and software solutions that are designed to enhance the performance in various enterprise workload environments. The company also provides system solutions that offer petabyte scalable capacity; data storage platforms and systems; datacenter software and systems; and HDDs and SSDs for desktop and notebook PCs, gaming consoles, security surveillance systems, and set top boxes. In addition, it offers NAND-flash embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, automotive, IoT, and connected home applications; NAND-flash memory wafers; and custom embedded solutions and iNAND embedded flash products, such as multi-chip package solutions that combine NAND-flash and mobile dynamic random-access memory in an integrated package. Further, it provides client solutions that consist of HDDs and SSDs embedded into external storage products; removable cards for use in mobile phones, tablets, imaging systems, still cameras, action video cameras, and security surveillance systems; USB flash drives used in computing and consumer markets; and wireless drive products. Additionally, the company licenses its intellectual property. It sells its products under the HGST, SanDisk, and WD brands to original equipment manufacturers (OEMs), distributors, resellers, cloud infrastructure players, and retailers. It serves storage subsystem suppliers, OEMs, Internet and social media infrastructure players, and PC and Mac OEMs. The company was founded in 1970 and is headquartered in San Jose, California.
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