May 24, 2025 a 07:31 am
WDC: Dividend Analysis - Western Digital Corporation
Western Digital Corporation (WDC) faces notable challenges in its dividend strategy. Currently, the firm does not provide a dividend yield, a significant concern for income-focused investors. Noteworthy is the suspension of dividends and a negative 5-year dividend growth rate, reflecting potential underlying financial intricacies. This circumstance necessitates close examination of financial health and future strategic directions to assess investment viability.
📊 Overview
This section provides a snapshot of the key dividend and sector-specific metrics relevant to the financial health of Western Digital Corporation.
| Metric | Value |
|---|---|
| Sector | Technology |
| Dividend yield | 0 % |
| Current dividend per share | 0 USD |
| Dividend history | 10 years |
| Last cut or suspension | None |
📈 Dividend History
The dividend history offers insight into the firm's previous commitment to returning value to shareholders. Notably, the suspension of dividends reflects on current fiscal constraints or strategic reinvestment needs.
| Year | Dividend per Share |
|---|---|
| 2025 | 0.1 USD |
| 2020 | 0.75586 USD |
| 2019 | 1.37793 USD |
| 2018 | 1.75586 USD |
| 2017 | 1.87793 USD |
📉 Dividend Growth
Dividend growth rates are critical for predicting future performance. The negative growth over five years highlights areas of potential financial distress and demands careful consideration for potential recovery strategies.
| Time | Growth |
|---|---|
| 3 years | 0 % |
| 5 years | -11.32 % |
The average dividend growth is -11.32% over 5 years. This indicates a concerning trend in dividend policy execution.
🗣️ Payout Ratio
The payout ratio gives insights into how well earnings support dividend payments. With a 0% payout ratio in both EPS and FCF models, it suggests a halt in dividend disbursements, which may be due to strategic restructuring or financial challenges.
| Key figure | Ratio |
|---|---|
| EPS-based | 0 % |
| Free Cash Flow-based | 0 % |
The absence of a payout ratio suggests complete suspension of dividends, necessitating an understanding of future payout potential.
🔄 Cashflow & Capital Efficiency
Analysis of cash flow and capital efficiency is crucial for evaluating a company's ability to generate funds and sustain operations, especially in lieu of paying dividends.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | -4.18 % | -13.33 % | 7.55 % |
| Earnings Yield | -4.28 % | -18.72 % | 15.10 % |
| CAPEX to Op. Cash Flow | -165.65 % | -197.79 % | 58.88 % |
| Stock Comp. to Revenue | 2.00 % | 2.58 % | 1.73 % |
| FCF / Op. Cash Flow Ratio | 2.66 | 2.98 | 0.41 |
The variability in cashflow yields and CAPEX allocation indicates strategic fiscal adjustments are essential for long-term viability.
📋 Balance Sheet & Leverage Analysis
Key leverage metrics are pivotal in assessing the firm's financial stability and its ability to meet obligations.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.69 | 0.65 | 0.57 |
| Debt-to-Assets | 0.31 | 0.29 | 0.27 |
| Debt-to-Capital | 0.41 | 0.39 | 0.36 |
| Net Debt to EBITDA | 17.15 | -12.62 | 1.31 |
| Current Ratio | 1.32 | 1.45 | 2.07 |
| Quick Ratio | 0.78 | 0.77 | 1.28 |
| Financial Leverage | 2.24 | 2.25 | 2.15 |
The increase in debt ratios points towards higher leverage levels, signaling the need for careful monitoring of the financial strategies pursued by Western Digital Corporation.
💪 Fundamental Strength & Profitability
The profitability and operational efficiency of the firm are essential for sustaining operations and delivering shareholder value.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -7.38 % | -15.73 % | 12.65 % |
| Return on Assets | -3.30 % | -6.98 % | 5.89 % |
| Net Margin | -6.14 % | -13.85 % | 8.23 % |
| EBIT Margin | -1.88 % | -10.05 % | 13.17 % |
| EBITDA Margin | 2.49 % | -3.25 % | 19.13 % |
| Gross Margin | 22.65 % | 15.32 % | 31.26 % |
| R&D to Revenue | 14.67 % | 16.31 % | 12.36 % |
The fluctuations in these ratios underscore the challenges faced in maintaining consistent profitability and suggest potential for strategic realignment.
📅 Price Development
✅ Dividend Scoring System
| Criterion | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 0 | |
| Dividend Stability | 1 | |
| Dividend Growth | 1 | |
| Payout Ratio | 1 | |
| Financial Stability | 2 | |
| Dividend Continuity | 1 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 2 |
Total Score: 10/40
⚠️ Rating
Western Digital Corporation's current financial stance reflects substantial challenges, particularly with its dividend policy and leverage profile. Investors should exercise caution, given the zero dividend yield and potential for volatility due to financial restructuring. A strategic turnaround could provide future opportunities, but risk mitigation should be prioritized.