Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Corning Incorporated (GLW): Is This Buffett’s Next Acquisition?

Page 1 of 2

On Feb. 14, the management of H.J. Heinz Company (NYSE:HNZ), the specialty ketchup and beans manufacturer, announced that it agreed to be acquired for $28 billion by outside investors, including Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A). The deal is shaping up to be the largest acquisition in the food industry ever. In response to the news, shares jumped 20% to close at $72.50.

Corning Incorporated (NYSE:GLW)Buffett’s acquisition guidelines

Mr. Buffett isn’t looking for a hyper growth machine or for “the next best story.” In that sense, the baked beans-to-ketchup group is a classic Buffett company: steady, predictable growth; small repeatable purchases unaffected by economic cycles or fashion; a wide “moat” to repel rivals in the form of one of the world’s most recognizable brands; and years of emerging market growth to come. For the last five years, earnings growth has averaged 7.1% per year. Not anything particularly exciting, but fairly high and consistent. The stock pays a dividend of 2.83% a year, and it shows an annual dividend growth rate of 6.3% a year.

Sitting on a cash position of $42 billion (and counting…), Berkshire is on the hunt for other lucrative deals, both private and public. Below is a short list of prospective companies to be acquired next by Mr. Buffett.

The candidates

With 15% annual earnings growth over the last five years and a projected 9.8% for the next five, perhaps McDonald’s Corporation (NYSE:MCD) is a great choice. The current dividend yield is 3.3% and has been increasing at an annual clip of 10%. The company’s growth rate has been 13.9% annually over the last five years. McDonald’s has one of the most recognizable brands in the world. This gives it a vast competitive edge over other competitors in the restaurant business.

Corning Incorporated (NYSE:GLW) is another company that I’m sure Mr. Buffett keeps a file on. The specialty all-glass-related company was founded in 1851, and has since mastered the art and technology of glass making. Corning is extremely dominant in its field with the company controlling nearly 50% of the glass panel market globally, and its name is associated with high-quality products worldwide.

Glass making has some serious barriers to entry as a result of heavy investments associated with plants and equipment. This fact positions Corning in an excellent spot to keep making piles of money from glass and other products. The company’s quarterly revenue growth is 14% year-over-year, and it’s able to maintain a very high gross profit margin of 22% due to market dominance and quality. It’s now trading on the cheap at a forward P/E of only 10.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!