This market leader could be a great choice for the long term


Corning Incorporated (GLW) is active in display technologies, optical communications, environmental technologies, specialty materials and life sciences worldwide. The Company operates through five segments: display technologies, optical communications, specialty materials, environmental technologies and life sciences.

GLW is one of the world’s leading innovators in materials science. The company participates in the invention of many advanced technologies. It is engaged in the production of glass, ceramics and optical fiber. The Company’s products include scratch-resistant Gorilla Glass, gasoline particulate filters, fiber optics and flat panel displays.

GLW is expected to benefit from the growing adoption of 5G globally, as it provides fiber optic products to various telecom companies. The company has a strong foothold in the lucrative semiconductor industry through its majority stake in Hemlock Semiconductor. Hemlock Semiconductor manufactures polysilicon for semiconductors and solar wafers.

The company produces gorilla glass panels for mobile phones that enable millimeter wave reception. Additionally, as the world moves toward a cleaner future, the company’s gasoline particulate filters are expected to help automotive OEMs meet emission standards.

The company is well known for its economies of scale. Moreover, its increasing expenditure on R&D should give it an edge over its competitors.

GLW’s four-year average dividend yield is 2.57%, and its projected annual dividend of $1.08 translates into a yield of 3.43%. The company has increased its dividend for 11 consecutive years. Its dividend has increased at a CAGR of 10.31% over the past three years.

The stock has lost 15.3% in price since the start of the year and 22.9% over the past year to close the last trading session at $31.51. It is currently trading 27.5% below its 52-week high of $43.47, which it reached on February 10, 2022.

Here’s what could influence GLW’s performance in the coming months:

Strong finances

GLW’s net sales increased 11.8% year-on-year to $3.68 billion for the first quarter ended March 31, 2022. The company’s operating income increased 13.5% year-on-year annual to reach 570 million dollars. Additionally, its EPS came in at $0.68, representing a 1.5% year-over-year increase. Additionally, its net income rose 19% sequentially to $581 million.

Favorable analyst estimates

Analysts expect GLW’s revenue for fiscal 2022 and 2023 to grow 8.8% and 4.8% year-over-year to $15.37 billion and $16.11 billion, respectively. billions of dollars. Its EPS for fiscal 2022 and 2023 is expected to rise 13% and 12% year-over-year to $2.34 and $2.64, respectively. It has exceeded Street EPS estimates in three of the past four quarters.

Updated assessment

In terms of before EV/EBITDA, GLW’s 7.60x is 35% lower than the industry average of 11.71x. Its advanced P/S of 1.73x is 35.5% lower than the industry average of 2.68x. Additionally, the stock’s 2.16x forward EV/S is 20.5% below the industry average of 2.72x.

High profitability

In terms of 12-month net profit margin, GLW’s 13.05% is 152.2% higher than the industry average of 5.17%. Likewise, its Capex/S of 11.96% over 12 months is 406.2% higher than the sector average of 2.36%. Additionally, its 15.31% 12-month leveraged FCF margin is 64.7% higher than the industry average of 9.30%.

POWR ratings are promising

GLW has an overall rating of B, which equates to a buy in our POWR rating system. The POWR Rankings are calculated taking into account 118 different factors, each factor being weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight distinct categories. GLW has a B rating for quality, in line with its 16.29% 12-month EBIT margin, which is 102% above the industry average of 8.06%.

It has a B rating for growth, in line with favorable analyst estimates and its strong financials.

GLW is ranked #10 out of 36 stocks in Rank A Industrial – Manufacturing industry. Click here to access GLW’s ratings for Value, Momentum, Stability and Sentiment.

Conclusion

GLW’s products, such as fiber optics, gorilla glass panels, gasoline particulate filters and semiconductors, are already in high demand. Yet, their market is expected to grow further due to their efficiency in future technologies.

Given the company’s strong financials, favorable analyst estimates, industry-beating profitability and discounted valuation, it might make sense to invest in the stock for the long term.

How does Corning Incorporated (GLW) compare to its peers?

GLW has an overall POWR rating of B, which equates to a buy rating. You may want to consider investing in the following industrial and manufacturing stocks with an A (Strong Buy) and B (Buy) rating: Vishay Precision Group, Inc. (VPG), Core Molding Technologies, Inc. (CMT) and Tredegar Corporation (XL).


GLW shares were trading at $31.28 per share on Friday afternoon, down $0.23 (-0.73%). Year-to-date, GLW is down -14.76%, compared to a -20.32% rise in the benchmark S&P 500 over the same period.

About the Author: Dipanjan Banchur

Ever since he was in elementary school, Dipanjan had been interested in the stock market. This enabled him to obtain a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan is particularly interested in reading and analyzing emerging trends in financial markets. After…

More resources for actions in this article

Previous Samsung plans to introduce 2G vRAN solution
Next More UK households are turning to expensive lenders, says Charity | Borrowing & Debt