Contrasting Western Digital (WDC) and Its Competitors

Western Digital (NASDAQ:WDC) is one of 82 public companies in the “Technology Hardware, Storage & Peripherals” industry, but how does it weigh in compared to its peers? We will compare Western Digital to related businesses based on the strength of its earnings, analyst recommendations, valuation, profitability, dividends, institutional ownership and risk.

Valuation & Earnings

This table compares Western Digital and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Western Digital	$9.52 billion	$1.89 billion	32.53
Western Digital Competitors	$23.72 billion	$3.28 billion	11.36

Western Digital’s peers have higher revenue and earnings than Western Digital. Western Digital is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Western Digital has a beta of 2.11, meaning that its share price is 111% more volatile than the S&P 500. Comparatively, Western Digital’s peers have a beta of 1.59, meaning that their average share price is 59% more volatile than the S&P 500.

Dividends

Western Digital pays an annual dividend of $0.60 per share and has a dividend yield of 0.1%. Western Digital pays out 3.6% of its earnings in the form of a dividend. As a group, “Technology Hardware, Storage & Peripherals” companies pay a dividend yield of 3.4% and pay out 41.3% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings for Western Digital and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Digital	0	4	18	2	2.92
Western Digital Competitors	1043	4256	7575	357	2.55

Western Digital currently has a consensus price target of $520.32, suggesting a potential downside of 4.50%. As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 28.06%. Given Western Digital’s peers higher probable upside, analysts clearly believe Western Digital has less favorable growth aspects than its peers.

Insider & Institutional Ownership

92.5% of Western Digital shares are held by institutional investors. Comparatively, 51.3% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by institutional investors. 0.2% of Western Digital shares are held by company insiders. Comparatively, 9.3% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Western Digital and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Digital	55.29%	42.95%	20.37%
Western Digital Competitors	-617.49%	-14.66%	1.39%

Summary

Western Digital beats its peers on 10 of the 15 factors compared.

About Western Digital

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications. The company also provides enterprise HDDs; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; and data storage platforms. In addition, it offers external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field backup of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the Western Digital, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.