Despite its shrinking margins, Corning’s prospects look promising
Think Corning and you might think glass, but there’s much more to this high-tech giant. It’s in the business of specialty glasses and ceramics, supplying fiber-optic networks, LCD television makers and more.
Glass has been around for thousands of years, but Corning keeps innovating. Its robust Gorilla Glass is now found on millions of mobile phones and tablets, and it has recently introduced Willow Glass, which is thin and flexible. Gorilla Glass is present on more than 1 billion devices from more than 33 brands. The latest version of it is reportedly 50 percent stronger than the last version, and will hide some 40 percent of scratches from the naked eye.
All is not rosy at Corning right now, though, with profit margins shrinking recently and debt inching up (though its cash is plentiful). But sales of televisions are expected to pick up in 2013, and mobile devices are proliferating rapidly. Corning’s future is likely to be brighter than its present.
Analysts expect the company to grow by about 12 percent annually over the next five years, so with its recent price-to-earnings (P/E) ratio of 10 and its forward P/E near 8, Corning’s stock seems rather attractively valued. It even offers a dividend, recently yielding 3 percent. (The Motley Fool owns shares of Corning and its newsletters have recommended it.)
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