Daily Stock Pick: Western Digital

I'm now looking for a second technology sector representative for my new Ivy portfolio.

That technology sector has nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health, information technology and services, to internet, scientific instruments, software, solar, and all such techno-marvels.

Today I'm reviewing a large-cap data storage firm, named Western Digital Corp. Its trading ticker symbol is WDC.

Western Digital Corp is the global leader in the hard disk drive market. It develops, manufactures, and provides data storage solutions that enable consumers to create, manage, experience and preserve digital content. Its products include HDDs and SSDs.

It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, and other portable and wearable devices, as well as automotive, IoT, industrial, and connected home applications. It also fabricates flash-based memory wafers; and embedded storage solutions and iNAND embedded flash products.

The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions.

The company sells its products under the HGST, SanDisk, and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure players, and retailers.

Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

I use three key data points to gauge the value of any dividend equity like Western Digital Corp:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

WDC Price

WDC's price per share closed at $36.50 yesterday. A year ago its price was $85.16. So price dropped $48.66 per share last year, or 57%.

Assuming WDC's stock trades in the range of $30 to $60 next year,  WDC's recent $36.50 price could move up by $3.50 and grow to $40.00 by mid-January, 2020.

WDC Dividends

WSC's most recent quarterly dividend was $0.50 declared November 7th and paid January 14th, 2019 (Tuesday).

That $0.50 quarterly payout equates to $2.00 annually and yields 5.48% at yesterday's $36.50 closing price.

Gains For WDC?

Adding the $2.00 annual estimated dividend to my estimated $3.50 annual price upside estimate for Western Digital Corp shows a $5.50 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Just under $1,000.00 invested today at the $36.50 recent price would buy us 27 WDC shares.

A $10 broker fee paid half at purchase and half at sale costs $0.37 per share.

Subtract that $0.37 brokerage cost from the estimated $5.50 gross annual gain leaves a net gain of $5.13 X 37 shares

= $189.91

for about 19% net gain on a $985.50 investment.

Therefore, Western Digital Corp whose trading ticker symbol is WDC, now shows a possible 19% net gain including a 5.48% dividend yield.

Thirty brokers cover this stock:

Nine say "buy" WDC.

Two say WDC will "outperform" peers.

Seventeen say "hold" your WDC shares.

One says WDC will "underperform" peers.

One says "sell" WDC.

Therefore, you can look at Western Digital Corp and see it has made money, is making money, and could rise to net a 19% annual gain including that 5.48% estimated dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Western Digital Corp is worth your time and money.