Reasons Why GLW Will Outperform BDC in the Next Three Years
Below, we discuss additional reasons why we believe GLW stock will outperform BDC stock in the next three years.
We believe that Corning stock (NYSE: GLW) is currently a better pick over its competitor Belden stock (NYSE: BDC), despite trading at a comparatively higher valuation of 1.9x trailing revenues vs. 1.1x for Belden. This valuation gap can be attributed to Corning’s superior revenue growth over recent years and better profitability.
Here at Trefis, we believe that GLW stock will offer better returns than BDC stock in the next three years. We compare a slew of factors such as historical revenue growth, returns, and valuation multiple in an interactive dashboard analysis of Corning vs. Belden: Which Stock Is A Better Bet? Parts of the analysis are summarized below.
Looking back over the past few years, it's clear that Corning's revenue growth has been strong and steady. This is thanks in large part to the company's innovative products and commitment to customer satisfaction.
- Looking at the recent quarters, both companies have managed to see robust sales growth. However, Belden has comparatively seen faster revenue growth of 23.7% over the last twelve months in comparison to Corning's 11.0%.
- Looking at a longer time frame, Corning has fared better, with its sales rising at an average annual growth rate of 8.2% to $14.1 billion in 2021, compared to $11.3 billion in 2018. Belden's sales grew at an average annual rate of 5.0% to $2.4 billion from $2.2 billion over the same period. Corning's stronger performance is due to a number of factors, including its diverse product portfolio and geographical reach.
- Looking ahead, Corning is optimistic about the long-term prospects for its automotive business, despite the current challenges posed by the semiconductor chip shortage. The company is expecting continued growth in demand for its gasoline particulate filters, due to the increasing adoption of emission regulations in Europe and China. In addition, Corning is investing in new technologies that it believes will enable it to capture a larger share of the automotive market in the future.
- Corning is a company that manufactures optical fiber, and it has seen an uptick in demand for its products in recent months. This is due to the fact that 5G networks are being rolled out by telecom carriers around the world, and they need optical fiber to support the infrastructure.
- Belden is a leading provider of signal transmission solutions for a variety of applications. The company operates in two segments - Enterprise Solutions and Industrial Solutions - and offers a wide range of products, including networking, connectivity, and cable products. Belden is committed to providing innovative solutions that meet the needs of its customers and help them stay ahead of the competition.
- Looking ahead, Belden is poised for continued growth as demand for its industrial automation, smart buildings, and 5G products increases. With a strong product portfolio and passionate team, Belden is well-positioned to help its customers meet the ever-changing demands of the marketplace.
- The Corning Revenue and Belden Revenue dashboards provide essential insights into the companies’ sales figures. By tracking revenue data over time, businesses can make more informed decisions about their growth strategy and budgeting.
- We expect both companies to see revenue growth over the next three years, with Corning's growth rate outpacing Belden's. Specifically, we expect Corning's revenue to grow at a compound annual growth rate (CAGR) of 5.1% over this period, compared to a CAGR of 1.6% for Belden.
- Looking ahead, we expect companies negatively impacted by Covid to experience a gradual recovery in quarterly revenue, eventually returning to their pre-Covid revenue levels. For companies that were growing before the pandemic, we expect them to continue growing, albeit at a slightly slower rate than before Covid.
As a news article, I would say that Corning is more profitable than ever. They have increased their profit margins and are doing well in the market.
- Corning's superior operating margin over the last twelve months indicates that it is a stronger and more efficient company than Belden. This is good news for shareholders and investors, as it suggests that Corning is a more stable and profitable business.
- It is clear that the pandemic has had a significant impact on employment levels in the United States. The figures for 2020 show a marked increase in unemployment, compared to the pre-pandemic levels in 2019.
- Corning is a clear leader when it comes to free cash flow margin. Their 22.0% margin is more than double Belden's 9.3%.
- Looking at our Corning Operating Income and Belden Operating Income dashboards, we can see that there is more to come.
- Looking at financial risk, both companies are comparable. Corning's 24.4% debt as a percentage of equity is lower than 39.8% for Belden, but its 5.5% cash as a percentage of assets is lower than 17.4% for the latter, implying that Corning has a better debt position, and Belden has more cash cushion.
The Net of It All The internet has become a powerful tool that can connect people from all over the world.
- Looking at the historical revenue growth, profitability, and debt position, it's clear that Corning is the better company. Belden may have more cash on hand, but it is also trading at a lower valuation. In the end, Corning is the better choice for investors.
- I believe Corning is currently the better choice of the two despite its higher valuation due to high fluctuations in P/E and P/EBIT.
- Looking at the table below, it's clear that investors are better off buying Corning stock over Belden stock, based on Trefis Machine Learning analysis. Corning is expected to have a return of 20% over the next three years, while Belden is expected to have a negative return of 2%. This is a significant difference, and it's something that investors should keep in mind when making their decision.
I believe that GLW stock will outperform BDC, but it is helpful to see how Corning's peers fare on the metrics that matter. I believe that other valuable comparisons for companies across industries can be found at Peer Comparisons.
The Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you may be surprised at how counter-intuitive the stock valuation is for AZZ vs. Beacon Roofing Supplies. However, these discontinuities can provide opportunities for savvy investors to capitalize on.
There are a number of factors that are currently putting pressure on stocks, including inflation and the Fed raising interest rates. This has caused the stock of GLW to fall by 11% so far this year. However, it is still unclear how low the stock can go in a market crash. Comparing its performance to other stocks in previous market crashes may give us some clues. However, ultimately it is still difficult to say how low GLW stock can go in a market crash.
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As someone who's interested in finance and investing, I think it's great that Trefis offers price estimates for different companies and stocks. This is a valuable resource for anyone who wants to stay informed about the market and make smart investment decisions.