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Exploring Seagate’s and Western Digital’s Financial Metrics

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Dec. 4 2020, Updated 10:52 a.m. ET

Operating and net margin

Analysts expect Western Digital’s (WDX) operating margin to be 26.2% in fiscal 2018 and to fall to 23.8% in fiscal 2019. Its net margin is expected to be 2.8% in 2018 and 11.4% in 2019. Its return on assets is expected to be 16.2% in 2018 and 10.7% in 2019, and its return on equity is expected to be 31.5% in 2018 and 25.8% in 2019.

Analysts expect Seagate’s (STX) operating margin to be 16.1% in fiscal 2018 and to rise to 16.7% in fiscal 2019. Its net margin is expected to be 10.2% in 2018 and 12.2% in 2019. Its return on assets is expected to be 10.5% in 2018 and 13.5% in 2019, and its return on equity is expected to be 90.3% in 2018 and 77.4% in 2019.

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Balance sheet analysis

WDC’s ratio of capex to current assets is expected to be 6% in 2018 and 6.2% in 2019. Its cash flow-to-sales ratio is expected to be 24.4% in 2018. Seagate’s ratio of capex to current assets is expected to be 3.6% in 2018 and 4.1% in 2019. Its cash flow-to-sales ratio is expected to be 18.8% in 2018 and 17.8% in 2019.

Dividend yield

WDC has a dividend yield of 2.6%, indicating an annualized payout of $2.00 per share and a payout ratio of 14.9%. Seagate has a dividend yield of 4.4%, indicating an annualized payout of $2.52 per share and a payout ratio of 47.2%. The dividend yields of Hewlett Packard Enterprise (HPE), NetApp (NTAP), and IBM (IBM) are 2.9%, 1.9%, and 4.2%, respectively.

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