Contrasting Xerox (NASDAQ:XRX) & Seagate Technology (NASDAQ:STX)

Seagate Technology (NASDAQ:STX) and Xerox (NASDAQ:XRX) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Earnings & Valuation

This table compares Seagate Technology and Xerox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seagate Technology	$12.20 billion	15.11	$3.18 billion	$13.88	58.56
Xerox	$7.02 billion	0.06	-$1.03 billion	($7.38)	-0.44

Seagate Technology has higher revenue and earnings than Xerox. Xerox is trading at a lower price-to-earnings ratio than Seagate Technology, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Seagate Technology and Xerox, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seagate Technology	0	4	22	1	2.89
Xerox	1	2	0	0	1.67

Seagate Technology currently has a consensus price target of $986.00, suggesting a potential upside of 21.32%. Xerox has a consensus price target of $3.45, suggesting a potential upside of 6.48%. Given Seagate Technology’s stronger consensus rating and higher probable upside, research analysts plainly believe Seagate Technology is more favorable than Xerox.

Institutional & Insider Ownership

92.9% of Seagate Technology shares are held by institutional investors. Comparatively, 85.4% of Xerox shares are held by institutional investors. 0.8% of Seagate Technology shares are held by insiders. Comparatively, 1.5% of Xerox shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Seagate Technology and Xerox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seagate Technology	26.11%	369.98%	37.58%
Xerox	-11.93%	17.61%	0.65%

Dividends

Seagate Technology pays an annual dividend of $2.96 per share and has a dividend yield of 0.4%. Xerox pays an annual dividend of $0.10 per share and has a dividend yield of 3.1%. Seagate Technology pays out 21.3% of its earnings in the form of a dividend. Xerox pays out -1.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Seagate Technology has increased its dividend for 1 consecutive years. Xerox is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Seagate Technology has a beta of 2.06, meaning that its stock price is 106% more volatile than the S&P 500. Comparatively, Xerox has a beta of 2.4, meaning that its stock price is 140% more volatile than the S&P 500.

Summary

Seagate Technology beats Xerox on 14 of the 18 factors compared between the two stocks.

About Seagate Technology

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs. In addition, it provides Lyve edge-to-cloud mass capacity platform. The company sells its products primarily to OEMs, distributors, and retailers. Seagate Technology Holdings plc was founded in 1978 and is based in Dublin, Ireland.

About Xerox

Xerox Holdings Corporation, together with its subsidiaries, operates as a workplace technology company that integrates hardware, services, and software for enterprises in the Americas, Europe, the Middle East, Africa, India, and internationally. The company operates through two segments, Print and Other; and FITTLE. The Print and Other segment designs, develops, and sells document systems, solutions, and services; and IT and software products and services. The FITTLE segment offers financing solutions for direct channel customer purchases; and lease financing to end-users. It also offers workplace solutions comprising desktop monochrome, color, and multifunction printers, and ConnectKey software; digital printing presses and light production devices; and digital services that support workflow automation, personalization and communication software, content management solutions, and digitization services. In addition, the company provides graphic communications, in-plant, and production solutions; FreeFlow, a software solutions for the automation and integration of processing of print job comprising file preparation, final production, and electronic publishing; and IT services, end user computing devices, network infrastructure, and communications technology, as well as technology product support, professional engineering, and commercial robotic process automation. Further, it sells paper products and standalone software, such as CareAR, DocuShare, and XMPie; and invests in startups. The company sells its products through its direct sales force, distributors, independent agents, dealers, value-added resellers, systems integrators, and e-commerce marketplaces. The company was formerly known as Xerox Corporation and changed its name to Xerox Holdings Corporation in August 2019. Xerox Holdings Corporation was founded in 1903 and is headquartered in Norwalk, Connecticut.