Utility, food, beverage and tobacco are not the only sectors
to find dividend stocks. As noted in Friday's column, networking
giantCisco Systems (
) pays a healthy dividend.Seagate Technology (
) is another leading technology stock that pays dividends.
The hard-drive maker pays 32 cents a share each quarter, or
$1.28 on an annualized basis. This works out to a yield of about
Seagate has the biggest yield in IBD's Computer-Data Storage
industry group. The only other dividend-paying stock in the group
is Xyratex (
), with a 2.4% yield. Seagate is one of the highest-yielding tech
issues in the S&P 500, which it joined in late June.
Seagate didn't always reward shareholders with a dividend. It
halted payouts for more than two years starting in early 2009.
But Seagate announced the return of its dividend program in April
2011. The company cited its strong balance sheet, ability to
generate cash and its commitment to maximize shareholder
Seagate has since raised its dividend twice, both times this
In late January, the company lifted its payout by 39% to 25
cents a share per quarter. It also added $1 billion to its share
The second lift came in late July. That's when Seagate boosted
its dividend by 28% to the current rate of 32 cents. Its dividend
has surged 78% since its reinstatement.
Seagate has posted spotty earnings and sales results in the
past few years. It has a three-year Earnings Stability Factor of
65. The rating goes from 0 to 99, with lower numbers being
better. But the computer hard disk maker recently put up some big
numbers for its Q4 and fiscal 2012, which ended June 29.
Profit for the June-ended quarter bolted 761% to 24 cents a
share, though it missed expectations. Revenue jumped 57% to $4.48
billion, but also lagged expectations.
That followed EPS gains of 300% and 956% that ended a
five-quarter period of declining earnings.
For all of fiscal 2012, Seagate's earnings skyrocketed 444% to
$6.75 a share. Sales grew 36% to $14.9 billion. In its prior
fiscal year, profit tumbled 63%, while revenue fell 4%.