June 15, 2025 a 02:46 am
📊 STX: Dividend Analysis - Seagate Technology Holdings plc
Seagate Technology Holdings plc boasts a noteworthy dividend profile, with a history of consistent payments and steady growth. The company's strong sector position and substantial market capitalization enhance its ability to maintain shareholder rewards. Investors seeking a blend of moderate yield and growth potential may find Seagate's dividends appealing, particularly in the context of its technological sector dynamics.
🗣️ Overview
Seagate operates within the Technology sector, providing a dividend yield of 2.25% with its current dividend per share standing at 2.80 USD. The company has an impressive dividend history of 22 consecutive years without any recent cuts or suspensions.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Technology | 2.25% | 2.80 USD | 22 years | None |
📈 Dividend History
Analysis of Seagate's dividend history reveals a stable progression in dividend payments, underscoring the company's commitment to rewarding shareholders. Maintaining regular payouts is a critical indicator of financial health and investor confidence.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.44 |
| 2024 | 2.82 |
| 2023 | 2.80 |
| 2022 | 2.80 |
| 2021 | 2.71 |
👍 Dividend Growth
Dividend growth is a pivotal factor for investors seeking income and value appreciation. Seagate's dividend growth over the last three and five years demonstrates moderate yet consistent increases, reaffirming the firm's robust dividend strategy.
| Time | Growth |
|---|---|
| 3 years | 1.34% |
| 5 years | 2.11% |
The average dividend growth is 2.11% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
Seagate's payout ratios offer insights into its distribution sustainability. The EPS-based payout stands at 39.72%, while the free cash flow-based figure is notably higher at 76.84%. These figures suggest that while EPS coverage is comfortably low, the FCF-based payout is relatively elevated, indicating potential risks if earnings falter.
| Key figure ratio |
|---|
| EPS-based 39.72% |
| Free Cash Flow-based 76.84% |
The EPS-based ratio, at a manageable 39.72%, suggests strong coverage. However, the higher FCF payout indicates caution towards potential volatility in free cash flow streams.
💰 Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics provide a lens into Seagate's operational effectiveness. Detailed below is an evaluation of the company's cash flow attributes over recent years, pointing to its financial adaptability and strategic expenditure control.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.08% | 4.89% | 8.39% |
| Earnings Yield | 1.55% | -4.13% | 10.85% |
| CAPEX to Operating Cash Flow | 23.39% | 33.55% | 22.99% |
| Stock-based Compensation to Revenue | 1.94% | 1.56% | 1.24% |
| Free Cash Flow / Operating Cash Flow Ratio | 72.33% | 66.45% | 77.01% |
The mixed trends in free cash flow yield and CAPEX investments highlight variable cash deployment strategies, balancing immediate returns against long-term capital investments. The data reflects a generally cautious approach to capital allocation, ensuring consistent free cash flow generation.
🏦 Balance Sheet & Leverage Analysis
A robust balance sheet is fundamental for financial resilience, particularly under economic stressors. Below, key leverage and liquidity ratios for Seagate reveal insights into its financing structure and short-term solvency aspects.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | -4.07 | -4.55 | 51.80 |
| Debt-to-Assets | 78.47% | 72.14% | 63.13% |
| Debt-to-Capital | 132.54% | 128.20% | 98.11% |
| Net Debt to EBITDA | 4.58 | 15.50 | 2.09 |
| Current Ratio | 1.08 | 1.12 | 1.13 |
| Quick Ratio | 0.68 | 0.68 | 0.69 |
| Financial Leverage | -5.19 | -6.30 | 82.06 |
Seagate exhibits a heightened leverage profile, particularly in its negative debt-to-equity and financial leverage values. The persistent liquidity ratios reflect a degree of operational stability, albeit overshadowed by potential risks from elevated debt levels, necessitating prudent debt management.
📈 Fundamental Strength & Profitability
Seagate's fundamentals emphasize profitability and efficiency, crucial for long-term value creation. Detailed profitability metrics convey insights into operational margins and the company's ability to effectively allocate resources towards sustainable growth.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -22.47% | 44.12% | 15.13% |
| Return on Assets | 4.33% | -7.00% | 18.44% |
| Net Margin | 5.11% | -7.16% | 14.14% |
| EBIT Margin | 11.86% | -2.87% | 16.53% |
| EBITDA Margin | 15.72% | 4.08% | 20.66% |
| Gross Margin | 23.45% | 18.30% | 29.75% |
| Research & Development to Revenue | 9.98% | 10.79% | 8.07% |
Despite fluctuations in profitability, the emphasis on R&D reflects Seagate's commitment to innovation and maintaining competitive advantage. The contrasting margin profiles warrant strategic operational enhancements to uphold shareholder value.
💹 Price Development
✅ Dividend Scoring System
| Category | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 3 | |
| Financial Stability | 2 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 2 |
Total Score: 28/40
⭐ Rating
In conclusion, Seagate Technology Holdings plc presents a mixed but compelling investment case for dividend investors. While it scores highly on dividend stability and continuity, the financial stability and balance sheet quality pose potential concerns. As such, its robust dividend yield and commitment to consistent dividends make it a worthwhile consideration, balanced against the risks related to financial leverage and cash flow dependence.