Back when I was a rookie in the investment biz, the internet bubble was in full inflation mode. There were scores of terrible ideas; pets.com, for one. But there were also a few ideas that would change the world and how we communicate.

#-ad_banner-#The area of the internet buildout I was most interested in at the time was what some observers referred to as the “backbone,” which, as it turned out, was just another term for “network”. But it seemed like this was the place to be, much as steel and ancillary services were where the real money was made during the American railroad boom of the mid-nineteenth century.

Companies at the top of the backbone buildout food chain included Cisco Systems (Nasdaq: CSCO), the scandalous and now-defunct Worldcom, Nokia (NYSE: NOK), Ericsson (Nasdaq: ERIC), and old-tech-turned-new-tech Corning (NYSE: GLW). I’ve owned, traded, and written about Corning in the past. It’s time to have another look.

Once commanding triple-digit valuations during the mania of the late 90s Tech Bubble, GLW traded in a normal range until the return of volatility earlier this year. An unforgiving reckoning shaved 24% off the stock’s price as tech names across the board were punished. But, unlike some of its sector mates, Corning actually MAKES stuff.

Evolving from an old industrial name, having perfected its flagship Pyrex product during the Second World War, Corning became the leading manufacturer of fiber optic cable during the telecom buildout boom of the late 20th century. It’s second tech act came during the first decade of the current century with the introduction of Gorilla Glass, which became the standard in Apple’s (Nasdaq: AAPL) iPhone as well as other smartphones, tablets, and other display hardware. And despite the anemic stock performance, the third act is upon us.

Corning has made long strides in composite materials development. The most relevant products currently are applications in 3-D printing and hi-tech construction materials. The company’s XSTRAND product is a high-performance, composite filament for 3-D printing that will fill the needs of more accurate prototyping for manufacturers. But the real future lies in the construction materials space.

Corning has developed a glass fiber reinforced polymer composite rebar. Yes, that is a mouthful. Rebar, as you may or may not know, are the steel rods used to reinforce concrete in heavy construction. The significance of Corning’s new product is that it is more resistant to corrosion, especially in bridge and sea wall construction.

A while back, I wrote an article highlighting the coming U.S. infrastructure rebuild. While that has yet to materialize, it will happen sooner rather than later. The herd is completely unaware of this aspect of Corning’s business and, in its infinite short-sightedness, would rather hammer the stock due to Apple falling short on iPhone production.

Overall, the company’s numbers are solid. Last year’s revenues grew by 7.5% over the previous year ($9.39 billion to $10.11 billion). While the $1.72 earnings per share (EPS) is expected to be flat year-over-year, the company forecasts 2019 EPS of $1.95, a 13.3% increase. Long-term debt to capitalization sits at a reasonable 32.6%, and the company has grown the dividend at average annual rate of 11.7%.

Risks To Consider: The most imminent threat to the stock is its marriage to consumer tech hardware. Any economic slowdown that would affect mobile device sales would affect Corning, as display technologies make up 30% of its business.

However, the remainder is well-diversified across telecom equipment — a relatively steady business. As mentioned earlier, the specialty materials segment is doing well, and the company is also making progress in its environmental technologies and life sciences businesses, all of which are growth areas.

Action To Take: GLW shares currently trade at $26.65 with a forward P/E of 15.7 and a 2.7% dividend yield. Based on the deep discount to the 52-week high and management’s success at executing its plan, at 12- to 18-month price target of $31 makes sense. The result for investors would be a total return of 18%.

Editor’s Note: One of these companies is raising its dividends an average 30% per year.
1) Coca-Cola
2) Microsoft
3) Cisco
4) Johnson & Johnson
Click here for the surprising answer…