Corning (GLW) provided something for shareholders to cheer about when it delivered its quarterly earnings report this morning. I think it will prove to be just the tonic to gets its stagnant stock price moving upward again.
Key highlights from Corning's earnings report:
- EPS came in at 30 cents a share, 6 cents a share above the consensus.
- It announced it was increasing its dividend payout by slightly more than 10% so that it will now pay 40 cents a share annually.
- It also stated that a new $2B stock repurchase program will replace an existing $1.5B program, a nice increase in buying power to purchase shares.
- Margins increased 100bps in the quarter to 43%.
Corning produces specialty glasses, ceramics and related materials worldwide. The company operates in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences.
Four additional reasons GLW still has upside from just over $13 a share:
- The shares will now yield 3% after the latest dividend hike. The company has now doubled its dividend payout over the last two years as well.
- Insiders have purchased 200,000 new shares over the last six months.
- The company has a robust balance sheet with over $3B in net cash on the books (over 15% of its market capitalization).
- Corning is very cheap at 90% of book value and just over 6x operating cash flow.