These Factors Are Affecting Seagate’s Capital Returns


Nov. 20 2020, Updated 2:47 p.m. ET

STX declares $0.63 per share dividend

Seagate Technology (STX) returns value to its investors through a combination of dividends and share repurchases. The company’s board recently approved a cash dividend of $0.63 per share to be distributed on January 3, 2018.

In fiscal 1Q18 (September quarter) Seagate returned $350 million to shareholders through a combination of dividends and repurchases. In the prior quarter, fiscal 4Q17, Seagate returned $400 million to shareholders through dividends and share repurchases.

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$1.0 billion out of $1.9 billion in cash flows went towards capital returns

Seagate returned a little over $1.0 billion to shareholders in dividends and share repurchases in fiscal 2017. The company generated $1.9 billion in cash flow from operations in the fiscal year.

Since Seagate’s capital return is tied to the company’s financial health, as the management explained recently, it’s important to keep an eye on the company’s cash flow from operations and cash balance metrics. The company exited 1Q18 with a cash balance of $2.3 billion.

Capital returns for Seagate’s peers

Western Digital (WDC), Dell Technologies (DVMT), and NetApp (NTAP), some of Seagate’s peers in data storage solutions industry, also have capital return policies. NetApp returned a combined $204 million to shareholders in its fiscal 2Q18 (October quarter) through dividends and share repurchases.

Dell Technologies said it would spend $300 million over the next six months to repurchase a certain class of its shares. The company has spent $1.1 billion on share repurchases since closing the acquisition of EMC, the parent of VMware (VMW).

Western Digital recently announced that it was resuming share repurchases after suspending the program to allow it to close the acquisition of SanDisk. About $2.1 billion remains in Western Digital’s share repurchase budget.


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