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Corning to Reward Shareholders Through $4B Share Buyback

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Corning Inc (GLW - Free Report) recently announced that management has approved a new $4 billion share buyback program. By the end of 2016, Corning’s management expects to return approximately $6 billion to its shareholders in the form of dividends and share buybacks. The move will not only appease shareholders but will also boost the bottom-line.

Notably, in Oct 2015, Corning’s management, in its bid to create value for the shareholders and ramp up its product portfolio, introduced the Strategy and Capital Allocation Framework. As per the updated framework, Corning remains committed to return over $12.5 billion to shareholders and reinvest $10 billion into the business to propel growth and maintain its leadership position in the market.

What does this mean for Corning’s Stock?

Corning’s strong liquidity will support its share repurchase program. As of third-quarter 2016earnings, the company reported cash and cash equivalents of $4.8 billion.

Currently, Corning commands market leadership in the consumer electronics space with its Corning Gorilla Glass 5. Notably, the company also introduced the Gorilla Glass SR+ meant for the wearables segment.

Moreover, the company’s foray into the automotive segment with platform wins for the gas particulate filter solution as well as applications of Gorilla Glass in car windows and the dashboard augur well for the company.

As per a Markets and Markets report, by 2022, the smart glass market is estimated to be worth $8.13 billion, which is currently growing at a CAGR of 19.2%.

Given the huge opportunity the segment offers, Corning looks poised for steady growth ahead with more of such share buybacks and dividend payouts aimed at returning value to the shareholders of the company.

Stock Performance Overview

Notably, Corning’s stock has outperformed the broader Zacks Telecommunications Equipment industry on a year-to-date basis. While the stock has returned 34.5%, the industry generated a negative return of 0.8%.

The bullish momentum in the stock could be primarily attributed to solid performance from the Display technologies and Optical Communications segment. We believe the company remains focused on expanding its footprint in the automotive market, which will drive top-line growth going ahead.

Zacks Rank and Key Picks

At present, Corning carries a ZacksRank #2 (Buy).

Some better-ranked stocks in the broader technology space include Konami Holdings Corporation , Acacia Communications, Inc. and KVH Industries, Inc. (KVHI - Free Report) ,each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the consensus estimate for Konami Holdings’ current year has improved to $1.67 from $1.59 seven days ago.

Similarly, the consensus estimate for Acacia’s current year has improved to $2.33 from $2.28 over the past one month.

Last but not the least, the consensus estimate for KVH Industries’ current year has improved to 30 cents from 12 cents over the past 60 days.

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