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Western Digital Corp. (WDC), Seagate Technology PLC (STX): How Investing In Data Companies Can Generate Returns

New product launch with strong dividend

Seagate Technology PLC (NASDAQ:STX)’s profits from laptop data storage devices decreased to $183 million in the third quarter of 2013 from $416 million in the second quarter of 2012. According to a Trefis report, hybrid laptop and tablet usage has increased 100% in the past 5 years. The company used to manufacture 9mm thick hard drive for laptops. With the growing demand of the hybrid laptop/tablet, it has launched a 5mm thick hard drive on June 2, 2013. This device will target the hybrid laptops and tablets market. In the long run, the company’s global market share of hybrid laptop/tablet storage devices is expected to reach 10.50% by the year end 2015, while it is only at 5% this year.

Seagate Technology PLC (NASDAQ:STX) is the top dividend-paying stock of the NASDAQ 100 companies. The company reported $678 million of cash flow in the third quarter of 2013, and has distributed 75% of the free cash flow through dividend and share redemption. With its current operations, the company is expecting to generate $844 million of cash in the fourth-quarter. It is planning to distribute 70% of its cash flow to its shareholders. With an average dividend yield of 3.2%, Seagate Technology PLC (NASDAQ:STX) has a history of paying timely dividend to its shareholders since 2002.

Bottom line

Western Digital Corp. (NASDAQ:WDC)’s market share is expected to rise in the near future and it will also save operating expenses in the coming time. This will be beneficial for investors. EMC’s investment in the Pivotal platform and its first move towards software-defined storage platform will benefit the company in the long run. Seagate Technology PLC (NASDAQ:STX) is expected to increase its market share of laptop storage devices globally and with its strong dividend history, investors can expect better growth.

Considering the above potential of the companies, I recommend a buy for all three companies.

The article How Investing In Data Companies Can Generate Returns originally appeared on and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool owns shares of EMC and Western Digital. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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

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