Western Digital Corp. (WDC), Seagate Technology PLC (STX): Two Tech Stalwarts Changing With The Times

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Stec’s top line and earnings were $305 million and $0.50 a share, respectively, in 2011. So the business suffered greatly in 2012. Stec shareholders should probably sell the shares to lock in the price gain. If the deal falls apart, the shares will fall hard since Stec’s business is struggling.

Not Dead Yet

While expansion like this is important, investors also need to keep in mind that hard drives are likely to have a long life ahead of them. That’s true because mobile devices are connecting to computers that use hard disk drives. The more mobile devices, the more need for computers and cheap storage. Moreover, emerging markets are starting to make greater use of technology and cheap is the preferred option. That means hard drives.

Two Options, Similar Paths

Western Digital Corp. (NASDAQ:WDC) is a growth oriented investment option, with management doing an impressive job of keeping the balance sheet clean and, at the same time, expanding the business. Seagate Technology PLC (NASDAQ:STX) has been more focused on returning value to shareholders and, thus, has a notably higher yield and about twice as much debt. It’s a better option for income investors. Both, however, are working on shifting into the solid state drive market and likely have plenty of time to make the transition. The choice, then, is how you want to get there.

The article Two Tech Stalwarts Changing With The Times originally appeared on Fool.com and is written by Reuben Brewer.

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

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