SanDisk Corporation (SNDK), Western Digital Corp. (WDC): Data Storage Businesses With High-Yield Cash Return Plans

All three of these companies could grow with the rising demand for data storage, especially in new technology areas including mobile and cloud. However, the global PC business is dying. Consequently, they should plan ahead to significantly shift their businesses out of the declining PC segment and into the non-PC segment. That is the key to future growth and profitability.

My Foolish take

SanDisk Corporation (NASDAQ:SNDK) could deliver a high cash return to shareholders if it executed the share buyback plan quickly. However, I am not very excited with SanDisk at its current trading price because of the company’s high valuation compared to its peers.

Of the three companies discussed above, Western Digital Corp. (NASDAQ:WDC) seems to be the best choice for investors right now, due to its global market-leading position, low valuation, and low payout ratio. If Western Digital increases its payout ratio equivalent to Seagate Technology PLC (NASDAQ:STX)’s, the dividend yield could reach more than 3%. Last but not least, investors could benefit from the company’s rapid shift out of the PC segment to move into the growing non-PC segment.

Anh HOANG has no position in any stocks mentioned. The Motley Fool owns shares of Western Digital..

The article Data Storage Businesses With High-Yield Cash Return Plans originally appeared on Fool.com.

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