Corning Incorporated (GLW), Agilent Technologies Inc. (A): Two Electronics Companies to Buy and One to Sell

Investing in electronics companies is relatively risky due to fluctuations in demand. But because I see the economy staying strong over the next several years, I think demand for these firms’ technology will be long-lived.

Underneath those devices you are carrying comes a lot of testing and small parts. These stocks are behind the scenes, but are able to benefit from major breakthroughs in gadgetry. However, before buying just any of these stocks, it is important to ensure they have what it takes to not only keep current operations alive and well, but also to develop their products so that they can thrive on innovation.

Corning still knows what it takes

Corning Incorporated (NYSE:GLW) has major manufacturing capabilities that ensure the company is able to be the leader in supplies of glass substrates, which are used in liquid crystal displays, or LCDs. Its wide technology portfolio will also allow the firm to stay atop in the tech field. The displays make up the vast majority of Corning Incorporated (NYSE:GLW)’s net income, and are used in televisions, computer monitors, aircraft cockpit displays and instrument panels. Being a leader in these fields likely means a steady flow of revenue long into the future due to their popular nature.

The company also has a finger on the pulse of future technologies. In June, Corning Incorporated (NYSE:GLW) invested $60 million in California glass maker View. That company is producing “dynamic glass,” which can essentially reduce energy consumption by 20%, the firm stated. The glass can lighten and darken, to control the amount of heat and sunlight in buildings. With the global market for dynamic glass at about $100 billion a year, look for Corning Incorporated (NYSE:GLW) to invest further in the technology, and watch as its revenues take off alongside the technology’s growing appeal.

Eaton faces scandal

Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) is not the stock to own right now, as its credibility has been shot due to allegations from the Shareholders Foundation over executive compensation. According to the Foundation, Eaton Corporation, PLC Ordinary Shares (NYSE:ETN)’s Chairman, CEO and President received $13.5 million in pay in 2011, and that rose to $20.4 million in 2012. Likewise, the Vice Chairman and Chief Financial and Planning Officer’s compensation rose from $5.07 million in 2007 to more than $6.41 million in 2012. That casts a dark shadow on this company, and should turn shareholders off, as long as these executives are working for the company.

Furthermore, the firm is tied to its economic cycle, despite potential downturns in the economy. That means the return on investment would potentially fall below the cost of capital during recessions. This stock is staying out of my portfolio.