Seagate Stumbles, but Its 5.9% Dividend Yield Is Secure
Seagate's (NASDAQ: STX) stock recently tumbled after the hard drive maker's fourth-quarter numbers missed Wall Street's expectations. Its revenue rose 6% year over year to $2.52 billion, but missed estimates by $100 million. Its adjusted net income increased 17% to $311 million, or $1.20 per share, but also missed expectations by a dime.
Seagate's revenue has risen for two straight quarters, but the company expects its first-quarter revenue to decline 11% annually at the midpoint, missing the consensus estimate for roughly flat growth. It expects its adjusted EPS to decline 17%, which also would miss expectations for 23% growth.
The earnings miss and weak guidance were disappointing, but Seagate maintained its quarterly dividend of $0.65 per share -- which equals an impressive forward yield of 5.9%. I'll explain why that dividend remains secure, and how it could set a floor under Seagate's stock until its business recovers.
Source Fool.com
