LONDON, UK / ACCESSWIRE / June 16, 2017 / Pro-Trader Daily takes a closer look at Seagate Technology PLC (NASDAQ: STX) as the Company's stock will begin trading ex-dividend on June 19, 2017. In order to capture the dividend payout, investors must purchase the stock one day prior to the ex-dividend date that is by latest June 16, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:

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Dividend Declared

On April 26, 2017, Seagate announced that its Board of Directors has approved a quarterly cash dividend of $0.63 per share, which will be payable on July 05, 2017, to shareholders of record as of the close of business on June 21, 2017.

Seagate's indicated dividend represents a yield of 6.00%, considerably higher compared to the average dividend yield for the Technology sector of 1.32%. The Company is paying the same regular dividend spanning back to October 2015, where Seagate's Board of Directors approved a 17% increase in the Company's targeted regular cash dividend. Seagate has been paying a dividend on a regular basis since 2011.

Dividend Insights

Seagate has a dividend payout ratio of 56.5% which means that the Company distributes approximately $0.57 for every $1.00 earned, and this also demonstrates that the dividend is sufficiently covered by earnings currently. According to analysts' estimates, Seagate is projected to generate earnings of $4.61 per share in the coming year, which implies that the Company should be able to comfortably cover its annualized dividend of $2.52. The Company's cash, cash equivalents, and short-term investments totaled approximately $3.0 billion as on March 31, 2017. Having this liquidity cushion would allow the Company to absorb any fluctuations in earnings and pay the dividend without interruption.

About the Company

Headquartered in Dublin, Ireland, Seagate designs, produces and distributes electronic data storage technology and solutions. The Company offers hard drives, solid state hybrid drives, solid state drives, PCIe cards, and serial advanced technology architecture controllers for mission critical and near-line applications in enterprise servers and storage systems; client compute applications, including desktop and mobile computing; and client non-compute applications, such as digital video recorders, personal data backup and portable external storage systems, and digital media and surveillance systems. Seagate sells its products primarily to original equipment manufacturers, distributors, and retailers. Seagate was founded in 1979.

Recent Development for Seagate

On April 26, 2017, for its third quarter fiscal 2017, Seagate reported revenue of $2.7 billion; gross margin of 30.5%; net income of $194 million; and diluted earnings per share of $0.65. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 31.4%; net income of $329 million; and diluted earnings per share of $1.10.

During Q3 FY17, Seagate generated $426 million in cash flow from operations; paid cash dividends of $186 million; and successfully raised $1.25 billion in investment grade debt.

Conclusion

Seagate pays a substantially high dividend yield of 6.00%. The Company holds approximately $3 billion worth of cash and cash equivalents and generates approximately $1.78 billion in free cash flow annually, combined this with solid business and future growth prospects, Seagate presents a compelling dividend case.

Stock Performance

At the closing bell, on Thursday, June 15, 2017, Seagate Technology's stock rose slightly by 0.58%, ending the trading session at $41.52. A total volume of 3.66 million shares were traded at the end of the day. In the last six months and previous twelve months, shares of the Company have soared 1.67% and 82.79%, respectively. Moreover, the stock gained 8.78% since the start of the year. Shares of the Company have a PE ratio of 17.07 and have a dividend yield of 6.07%. The stock currently has a market cap of $12.29 billion.

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