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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Dividend Stocks That Want to Pay You More

Western Digital

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Western Digital (WDC) announced its fourth-quarter numbers yesterday, earning $1.71 per share on revenues of $3.7 billion. The numbers reflect a big tailwind in the computer storage business -- as cloud computing adds demand for server storage around the world, hard drive makers are working overtime to fill those orders. And WDC has been in "buy mode" to try and boost its scale.

>>3 Big Tech Stocks to Trade (or Not)

The firm's deal to acquire Hitachi's hard drive unit made the firm the biggest HDD maker in the world. And smaller tuck-in acquisition Stec (STEC) will round out the firm's solid state drive portfolio. Now that buying has subsided, though, management still needs to figure out what to do with WDC's hefty cash position. A dividend boost makes a lot of sense.

As of the most recent quarter, Western Digital carries $4.3 billion in cash, a large position that offsets less than $2 billion in debt. That means that more than 15% of Western Digital's market capitalization is made up of cold hard cash -- and that the firm's effective price-to-earnings ratio sits at a meager 8.5 after all of that it taken out. It's hardly a lofty price tag on a stock that's got some attractive industry trends at its back.

Currently, Western Digital pays out a 25-cent dividend for a 1.57% yield.

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