Corning Ups Net Payout Yield Potential
Always looking for companies with high Net Payout Yields (NPY) potential, Corning (GLW) threw their cap into the ring last night. Remember that NPY is the combination of dividends and net stock buybacks. Stock buybacks continue to be ignored by most investors when considering the yield equation. Top companies only pay out roughly 30% of the yield via dividend these days. GLW announced that the dividend would be increased 50% and that a stock buyback program of up to $1.5B through the end of 2013. This brings the dividend yield up to a solid 2.5%. With any decent contribution from buybacks, the total yield or NPY could jump into the 5-6% range. Now it needs to jump higher than that to make our portfolio that has many stocks exceeding 10% yields. Though a 5% yield would have to be attractive in this market of low interest rates. According to the corresponding statement from GLW, lower capital spending in 2012 will drive up cash flow prospects. Accordingly this might signal that most...