Which Stocks Can Offer Better Returns Compared To Corning?

CORNING, NEW YORK, UNITED STATES – CORNING, NEW YORK, UNITED STATES – CORNING, NEW YORK, UNITED STATES – CORNING, NEW YORK, UNITED (Photo courtesy of Getty Images/John… [+] Greim/LightRocket)
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We believe that there are now better-valued stocks in the electrical equipment market than Corning (NYSE: GLW). Corning’s current price-to-operating-income ratio (P/EBIT) of 38x is significantly higher than EnerSys’ 22x, BWX Technologies’ 14x, and Energizer’s 11x. When compared to Corning, these stocks have a lower P/EBIT ratio, but they have all had stronger revenue and operating income growth. Because of the gap between value and performance, you might be better off investing in ENS, BWXT, and ENR rather than GLW shares. We arrive at this conclusion by analyzing historical patterns in revenue, operating income, and P/EBIT for these companies. More information is available on our dashboard – Better Bet Than Corning Stock: Pay Less To Get More From Sector Peers ENS, BWXT, ENR – parts of which are described here. 1. Increased revenue
Over the last three years, Corning’s revenue has grown at an average rate of 3.9 percent, compared to 9.3 percent for EnerSys, 8.0 percent for BWX Technologies, and 17 percent for Energizer. When looking at sales growth over the last twelve months, Corning’s 1.7 percent decline compares positively to EnerSys’ 5% decline, but it pales in comparison to BWX Technologies’ and Energizer’s average increase of 12 percent and 110 percent, respectively.
Corning’s recent sales reduction can be ascribed to the impact of Covid-19, which resulted in lesser capital spending and pricing pressure for its display glass products from certain of its clients. Closed office areas resulted in a surge in laptop demand, which bodes well for Corning’s premium glass business. Looking ahead, now that a number of nations have implemented large-scale immunization programs, capital spending by some of Corning’s clients is projected to increase, particularly in relation to 5G expansion, bode well for the company’s revenue growth.
EnerSys is well known for its UPS (uninterrupted power supply for computers and other devices), and its recent revenue growth has been fueled by acquisitions such as Alpha and Northstar, which have resulted in increased Energy Systems segment (UPS sector) revenues. However, sales of the Motive Power category (which mostly comprises power for electric industrial forklifts used in industry) have been hampered by the Covid-19-led economic slowdown in recent quarters. As the Covid-19 problem fades, EnerSys’ revenues are likely to improve, particularly in the industrial sector.
BWX Technologies, a U.S. nuclear component and fuel supplier, saw its top line grow by 12% in 2020, owing to increased fuel and downblending volume. The Laker Energy acquisition aided the company’s overall revenue development. The company anticipates stable top-line growth in the future, led by its Nuclear Operations Group, which specializes in the production of naval nuclear reactors.
Due to the acquisition of Spectrum Brands Holdings’ global battery, lighting, and portable power business, Energizer, the world’s largest battery maker, has enjoyed double-digit sales growth in recent years. With economies gradually opening up, Energizer is seeing stronger market circumstances, particularly in the Auto Care area.

2. Increased Operating Income
Corning’s three-year average operating income growth is -18%, far lower than EnerSys and Energizer’s -6 percent and BWX Technologies’ 8 percent growth. Higher operating income has resulted from the latter three’s improved revenue growth, which has been partially offset by ENS and ENR’s declining margins. Corning’s operational income dropped 40% in the last year, compared to -9.9%, 8.1 percent, and 14.0 percent for EnerSys, BWX Technologies, and Energizer, respectively. The increase in operating expenditures during the epidemic can be attributable to this.
It’s All Connected
Despite the fact that Corning’s revenue base is far greater than EnerSys, BWX Technologies, and Energizer, each of these firms has experienced higher revenue and operating income growth in the last twelve months and three years than Corning. Nonetheless, they appear to be far less expensive than Corning. Despite higher profit and revenue growth, these businesses have a lower P/EBIT ratio. Even if we look at revenue and operating income growth over the last twelve months, EnerSys, BWX Technologies, and Energizer outperform Corning, and Corning was trading at a higher multiple at the time.
ADDITIONAL INFORMATION FOR YOU
Corning’s persistent underperformance in revenue and operating income growth when compared to the other three companies supports our conclusion that the stock is overvalued in comparison to its peers, and we believe the valuation gap will narrow over time, favoring the group of more reasonably priced names. As a result, we believe that EnerSys, BWX Technologies, and Energizer are better buys right now than Corning.
While ENS, BWXT, and ENR stocks may beat GLW in the short run, 2020 has generated a slew of pricing anomalies that could lead to lucrative trading opportunities. For example, the stock value for Cirrus Logic vs. Northrop Grumman is very counter-intuitive.
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