Why I Plan on Selling High-Yield Dividend Stock Seagate Technology
I thought Seagate Technology (NASDAQ: STX) would have fared better in the last year during the coronavirus pandemic. Don't get me wrong, the stock price is up nearly 20% since I initially bought shares a couple of years ago, and the dividend (currently yielding 4.3%) was a nice bonus along the way. However, while its sales have been resilient in uncertain times, profit margins are under pressure and the most recent financial guidance left me wanting more.
Ultimately, Seagate's stock isn't exactly cheap anymore, and I think there are better opportunities elsewhere in the electronics hardware universe -- in spite of that high-yield dividend payout.
I don't want to take too much away from Seagate here. My thesis that it would be a resilient digital memory hardware play during the COVID-19 crisis has played out. As management explained on the last earnings call, revenue increased 2% year over year during calendar year 2020. Through the first half of the company's 2021 fiscal year (the six months ended Jan. 1, 2021), sales were down only 6% to $4.94 billion.
Source Fool.com
