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3 Reasons Why Investors Should Consider Corning

May 27, 2014 | About:
kcpl

kcpl

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Gorilla Glass by Corning (GLW) has proved to be a growth driver for the company. Corning has won over plenty of customers with this product, including Apple and Samsung. Looking ahead, there seems to be more upside in store for Corning. Let's see why.

The Smartphone Effect

Gorilla Glass is being used in most of the high end phones these days. According to the latest report, Apple was the best smartphone seller having sold 37 million units in the previous quarter while Samsung was second in the league with 36.5 million unit sales. An interesting fact to note is that Gorilla Glass is used on all iPhones. It is also used by Samsung for its Galaxy series among others. Others such as HTC, Motorola, LG, and Nokia also use the much vaunted Gorilla Glass for their phones.

On the other hand, analysts are expecting the smartphone market to see solid tailwinds in the coming days, reaching 1 billion shipments by 2015. This is good news for Corning as higher smartphone shipments will lead to greater demand for Corning’s scratch resistant glass. This will surely attract more customers leading to top line growth for the company.

Impressive Moves

Corning is working aggressively on product innovation. The company's dedicated work force is aiming at more innovative products. The engineers at Corning are focused on taking the Gorilla Glass experience to a new level and it is expected that this new product can been seen in the new iPhone by Apple in the future. It is bringing in a new version of Gorilla Glass, namely Lotus Glass. This new substrate is devised for use in OLED and LCD screens along with smartphones, tablets, and notebooks. This will probably help Corning increase its addressable market once OLEDs and LCDs start adopting its scratch-resistant cover.

Corning is also focusing on its expansion strategy. It is aiming at expanding its business to some other profitable ventures also. It is now focusing on Environmental Technologies and Life Sciences as well. With this segment, Corning is expected to fetch $1 billion of sales this year.

Besides that, Corning recently unveiled its higher resolution Lotus XT Glass. According to the company, the new protective glass offers one of the highest PPI, with minimal yield loss in the industry. These displays are meant for high resolution displays including OLEDs and optimized LCDs, and offer minimal loss of color vibrance. Naturally, gamers and imaging related professionals will now feel compelled to buy IPS displays equipped with Lotus glass.

Good Numbers

Corning is doing a good job in the smartphone market. The success of the company can be seen by the fact that Corning’s annual revenue has grown at a compounded rate of 21% over the last two years. Also, the company is expecting greater sales for its Gorilla Glass. This will provide investors with concrete reasons to consider Corning for their portfolios.

The company is also impressive on its ratios. Corning’s valuation is impressive as the company is trading at cheap P/E of 7.5. its dividend offering of 2.2% is another attraction for investors looking for a better payout.

The Takeaway

The company has done decently over the last few years and could do better in the future as the mobile computing revolution rages on. With sound fundamentals and a thriving business, Corning certainly looks like a stock which could find a place in an investor’s portfolio.


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