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Two 10% Dividend Stock Trades With Breakevens Below 52-Week Lows

Published Fri, 24 May 2019 09:15:00 -0400 on Seeking Alpha

We went looking for trades this week which we could use to nibble at the edges of some dividend stocks that would achieve breakevens near their 52-week lows. We found two tech stocks which fit the bill.
Intel (INTC) provided us with two option-selling trades with breakevens below its 52-week lows, while Seagate Technology (STX) has two trades which are less than 6% above its 52-week low, but also offer higher yields.
Dividends:
STX has the higher dividend yield of the pair, at 5.80%, while INTC yields 2.93%. STX also has a stronger five-year dividend growth rate of 13.32%, vs. 5.98% for INTC, but its dividend payout ratio is higher as well, at 45.32%, vs. 27.12% for INTC.
However, STX's higher five-year dividend growth rate is a bit misleading, as they've kept their quarterly dividend flat, at $.63, since 2016, whereas INTC had ~10% dividend growth in 2018, and ~5% growth in 2017.
INTC pays in a March/June/Sept/Dec. schedule, and STX pays in a Jan/April/July/Oct. schedule. Both companies issue 1099s at tax time.
Valuations:
Interestingly, both stocks are below their average five-year P/E ranges. They're both getting premium price/book valuations vs. their industries, but INTC's price/sales is far below its industry average, while STX's is above its industry average.
Financials:
INTC's ROA and ROE are better than its industry's average ratios, while its operating margin is a bit lower. It has higher debt leverage, but its debt/equity and net... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SEAGATE TECH 56.30   7.9 7.11 2.52 4.55
INTEL 53.01   12.4 4.29 1.26 2.43

SEAGATE TECH - STX
SEAGATE TECH - STX  


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