Corning Incorporated (NYSE:GLW) is one of those quiet, under-the-radar 5G stocks that continues to outpace the broader market. While many tech stocks, even well-established ones, gave up solid gains during the late-February sell-off, GLW stock did the opposite.
As of this writing, Corning stock is up roughly 15% since the start of January and up 90% year-over-year. GLW stock has also rallied by 135% since bottoming during the market-wide crash in March 2020.
Why the sustained optimism?
While short on news, Corning Incorporated gives investors what they want to hear. During the worst economic crisis since the Great Depression and the worst health crisis in 100 years, the company continued to report strong financial results and provide a solid outlook.
On top of that, Corning raised its dividend payout in 2020 and recently announced that it’s increasing its quarterly dividend payout by nine percent.
It’s as simple as that!
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GLW Stock Overview
Corning Incorporated no longer does what it used to be known for, manufacturing “CorningWare” and “Corelle” dishes. The company sold that division back in 1998.
Today, Corning specializes in manufacturing glass substrates for TVs, notebooks, mobile devices, and wearables; optical fiber for broadband networks and data centers; filters for catalytic converters; and pharmaceutical glass. (Source: “Business Segments,” Corning Incorporated,” last accessed March 17, 2021.)
That’s a great business to be in for the 5G era.
The company’s segments include Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, and Life Sciences.
The Display Technologies segment manufactures glass substrates for flat-panel liquid crystal displays and other high-performance display panels. Its thin, damage-resistant “Gorilla Glass” is featured in billions of mobile devices worldwide.
The Optical Communications segment manufactures carrier network and enterprise network components for the telecommunications industry.
The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics, and fluoride crystals.
The Environmental Technologies segment manufactures ceramic substrates and filters for automotive and diesel applications.
The Life Sciences segment manufactures glass and plastic labware, equipment, cell culture media, serum, and specialty surfaces that enable research, drug discovery, and bioproduction. Its “Valor Glass,” which is a new kind of glass composition for vaccine vials, was used to support 100 million COVID-19 vaccine doses.
Corning Incorporated Exceeds Q4 Expectations on All Fronts
For the fourth quarter ended December 31, 2020, Corning announced that its revenue increased 19% year-over-year and 12% sequentially to $3.4 billion. Its net income was down 41% year-over-year at $252.0 million, or $0.28 per share. (Source: “Corning Reports Full-Year 2020 Results Highlighted by Strong Fourth Quarter with Growth in All Segments,” Corning Incorporated, January 27, 2021.)
The biggest sales growth contributions came from the Environmental Technologies and Specialty Materials segments, which grew 19% and 20%, respectively. These strong gains were a result of European and Chinese regulations boosting the adoption of gasoline particulate filters and the newly released “Gorilla Glass Victus” and “Ceramic Shield” used in Apple Inc (NASDAQ:AAPL) smartphones.
The Optical Communications division’s sales returned to growth as the continued work-from-home trend juiced demand for bandwidth and carriers picked up the pace of network build-outs.
The Display Technologies segment grew its sales by six percent year-over-year, boosted by steep demand for large-screen TVs.
The Life Sciences division grew by seven percent year-over-year. The company has now shipped enough Valor Glass to support 100 million COVID-19 vaccine doses.
Looking ahead to the first quarter, Corning expects to report revenue in the range of $3.0 to $3.2 billion. At the midpoint, this represents year-over-year growth of 30%.
The company also expects its full-year revenue to grow, though it didn’t provide any numbers.
Quarterly Dividend to Increase 9%
Who doesn’t like getting a raise?
In early February, Corning announced that its board of directors approved a quarterly dividend of $0.24 per share, a nine-percent increase over the $0.22 per share paid quarterly in 2020. (Source: “Corning Announces Increase in Quarterly Dividend,” Corning Incorporated, February 3, 2021.)
Corning has raised its annual dividends for each of the last 11 years.
Tony Tripeny, executive vice president and CFO, noted, “We continue to focus our portfolio and utilize our financial strength. We generate strong operating cash flow, and we expect that to continue going forward.”
He added, “We will continue to use our cash to grow, extend our leadership, and reward shareholders. This dividend reflects Corning’s confidence in our future.”
Corning Incorporated is an excellent 5G stock that recently delivered outstanding fourth-quarter results, with each of its business segments growing its sales and profitability year-over-year.
Management expects that financial growth to continue in 2021 as the company’s end markets continue to recover from the coronavirus-incited declines in 2020.