Two days after talking up one of the smallest external drives you'll find, data storage specialist Seagate Technology (NYSE: STX) is ready to go big.

Late yesterday, the company issued upbeat fiscal third-quarter guidance and reinstated its dividend policy. Seagate quit paying dividends in 2009 to shave costs and avoid what appeared to be an irreversible slide toward bankruptcy.

No longer. Seagate expects $2.7 billion in fiscal third quarter revenue. Analysts had been calling for $2.62 billion in revenue, Barron's reports. The company's $0.18 per share dividend, payable on June 1 to those holding shares as of May 2, amounts to a 5% yield when annualized.

Neither EMC (Nasdaq: EMC) nor Western Digital (NYSE: WDC) -- Seagate's primary market foes -- pays a dividend, let alone one that yields almost as much as what dividend stalwarts AT&T and Verizon pay. Each telco offers a dividend yielding better than 5% at current prices.

Investors appear to find both Seagate's forecast and dividend enticing. Shares of the drive maker are up more than 8% as I write this, enriching common investors who've waited far too long to hear good news.

And yet there's unlikely to be anyone as happy as Seagate CEO Steve Luczo and his team. Luczo was a big buyer of his company's shares during the darkest days and still owns 1.29% of the shares outstanding, according to Capital IQ. His stake is worth a lot more today. Good. That's the way it should be.

Bravo, sir. I'm happy to eat my bearish words. Do you agree? Disagree? Let us know what you think about the data storage market, tech dividends, and Seagate's competitive positioning using the comments box below.

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