Seagate Technology Looks like an Undervalued Dividend Stock
Seagate Technology's (NASDAQ: STX) stock rallied nearly 50% this year as investors noticed that the hard drive maker was on the cusp of a cyclical recovery. But even after that massive rally, Seagate trades at just 11 times forward earnings and pays a forward dividend yield of 4.3%. Let's dig deeper to see why Seagate might be an undervalued income stock.
Seagate is the world's second largest maker of platter-based HDDs (hard disk drives) after Western Digital (NASDAQ: WDC). HDDs face tough competition from SSDs (solid-state drives), which store their data on flash memory instead of platters.
SSDs are pricier than HDDs, but they're smaller, faster, more power-efficient, and less prone to damage. Western Digital expanded into the SSD and flash memory market with its acquisition of SanDisk in 2016, but Seagate stayed focused on HDDs.
Source Fool.com
