Corning (NYSE:GLW) – Is it worth buying at current price (A Valuation)

I had mentioned before Corning (NYSE:GLW), a stock I owned. 

The reason why I own this stock is because my evaluation of its valuation shows that it is under-valued. 

The valuation method I normally use is the “Discounted Free Cash Flow” (DCF) modelling method, which I believe works well. 

The last traded price of GLW is US$23.85. 

The latest Earnings per share (EPS) of GLW is US$1.34, and dividend per share (DPS) is US$0.34. 

At a glance, the various ratios are as follow:

Price / Book = 1.57.

Price / Sales = 3.30.

Price / Earnings = 17.8.

Based on Analysts estimate of average EPS growth over next few years (I assume 10% for next 10 years), and a discount rate of 10%, and assuming growth rate dropped to inflation rate of about 2% after 10 years, I obtained an intrinsic value of US$30.49, which implies a margin of safety of 21.8% based on last traded price. 

I tried to double-check with Benjamin Graham’s valuation method, which gives me an intrinsic valuation of US$36.14, or a margin of safety of 34%. 

Given the above, I believe current price of US$23.85 is still a good deal.