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After Hiked Dividend And Buyback, Is Western Digital A Better Investment Than Seagate?

Seagate Technology (STX) and Western Digital (WDC) combine to control 85% of the hard disk drive, HDD, market, and are considered near equal investments by many investors. Recently, I provided reasons why I thought Seagate was the superior investment option, but then on Tuesday, Western Digital hiked its dividend by 25% and management authorized an additional $2 billion to its buyback program. Given the fact that dividends and buybacks can often be the difference between finding the superior investment among two market leaders, investors might ask whether Western Digital is now the better investment opportunity?

After Western Digital's 25% dividend hike, the stock now has a forward yield of nearly 2%. While comparable to the S&P 500, this still makes Western Digital a significant laggard to Seagate in the yield conversation. As seen in the above chart, Seagate Technology has a dividend yield of 3.75%, nearly twice that of… Read More …