Corning Incorporated Raises Annual Dividend Distribution Amount Eight Consecutive Years (GLW)
By: Ned Piplovic,
Corning Incorporated (NYSE: GLW) has been hiking its annual dividend distribution amount every year since 2010 and also boasts a one-year total return in excess of 20%.
In the past eight years, Corning has more than tripled its total annual payout amount and has maintained a double-digit-percentage average growth rate. Going out a little farther, the company has advanced its annual dividend distribution in nine out of the last eleven years, with no dividend cuts during this time.
Typically, income-oriented investors seek at least a 3% dividend yield, so while Corning’s current yield of 2.2% is below this threshold, it is significantly higher than the average industry yields. Additionally, Corning sports a low dividend payout ratio of 28%, so investors can be confident that the company will be able, at the very least, to maintain the current growth rate. Also, the 28% payout ratio is significantly better than the five-year average of 60%
With a growing annual dividend, a low payout ratio and a rising share price, Corning is worth the attention of investors, and not just the income-seeking ones. The company’s next ex-dividend date is coming up on August 30, 2018, so interested investors may want to take a position before then. Expect the next dividend distribution to be paid on Sept. 28 to all shareholders of record prior to the above-mentioned ex-dividend date.
Corning, Inc. (NYSE:GLW)
Corning Incorporated manufactures and sells specialty glass, ceramics and other advanced materials worldwide. The company’s Display Technologies segment manufactures glass substrates for liquid crystal displays (LCDs) used in televisions and modern computer screens. The Optical Communications segment manufactures fiber optic cable. Additionally, the Environmental Technologies segment manufactures ceramic substrates and filter products for emissions control. The Specialty Materials segment manufactures products that provide approximately 150 material formulations for glass, glass ceramics and fluoride crystals. The Life Sciences segment manufactures and supplies consumable scientific laboratory products. Founded in Somerville, Massachusetts as the Bay State Glass Company in 1851, the company moved to Brooklyn, New York before settling in its current location. The company changed its name to Corning Glass Works and moved again in 1968 to Corning, New York, where it is still based. The company change its name to Corning Incorporated in April 1989.
Corning’s current $0.18 quarterly dividend payout is 16% higher than the $0.155 distribution in the same period last year. At the current share price, the new annualized dividend amount of $0.72 amounts to a 2.2% yield, which is in line with the company’s own average yield over the past five years. However, Corning’s current yield is 28% higher than the 1.7% average yield of all the company’s peers in the Communications Equipment industry sub-segment and almost double the simple average yield of the entire Technology sector.
Corning suspended its annual dividend distributions in 2001 and did not resume the payouts until the third quarter of 2007. After paying a flat $0.05 dividend distribution for 17 consecutive quarters, Corning resumed dividend hikes in late 2011. Since then, the company has enhanced its total annual dividend amount 260% and boasts an average annual growth rate of 17.4% over the past eight years.
In mid-2015, Corning began a multi-year uptrend that lasted well into the trailing 12 months. In the last year, the share price increased more than 25% before peaking at $34.85 in January 2018. After the January peak, the share price dropped steeply in the first week of February and continued to decline towards a 52-week low of $26.35 at the end of May. However, since then, the share price has recovered almost 80% of those losses and closed on Aug. 17 at $33.02 — just 5% short of the January high. The Aug. 17 closing price was also 18.5% higher than it was one year earlier, 25.3% above the May low and almost 125% higher than it was five years ago.
In addition to the short-term total return of 21% over the past 12 months, shareholders have nearly doubled their investment over the past three years and enjoyed a 136% total return over the past five years.
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