Yet a quick glance at this company's income statement hardly paints the picture of distress. Consider that in both 2006 and 2007, before the financial crisis, Corning generated around $600 million in annual free cash flow, while over the past three years, that figure has averaged $1.3 billion. In fact, analysts at Merrill Lynch see that figure topping $1.5 billion by 2014.
What is Corning doing with all that cash flow? Well, it has boosted its dividend at a double-digit pace in the past three years; the dividend yield now stands at 2.8% and is poised to rise higher. And the company has bought back 90 million shares over the past six quarters. In April, 2013, Corning announced plans to buy back $2 billion more.
XeroxAfter being stuck in a $6-to-$8 trading range for several years, shares of Xerox ( XRX) have recently moved up above $9. Still, that's cold comfort for anyone who owned this stock five years ago, when it traded for $14. The good news: This office equipment and services titan is poised to re-visit those 2008 levels in coming years, thanks to prodigious free-cash-flow generation. >>4 Red-Flag Stocks to Sell This Summer For a bit of context, Xerox generated an average of $1.2 billion in annual free cash flow in the years 2004 through 2008. Yet in three of the past four years, that figure has exceeded $1.8 billion. What's Xerox's secret? A $6.4 billion to acquire Affiliated Computer Services in early 2010, a leading provider of outsourced services. It's a business with low growth prospects but very steady cash flow thanks to long-term contracts. Xerox's customer base was largely blue-chip companies, while ACS brought a customer base of mid-sized businesses. Goodyear Tire & Rubber Shares of tire maker Goodyear Tire & Rubber ( GT) have slid 30% in the past five years, as global car and truck sales remain below peak levels. But as auto sales move back to pre-recession levels, look for impressive free cash flow from this company. Over the past few years, Goodyear has spent billions to modernize its global network of factories, which drained away cash flow. Those investments are now complete and are already bearing fruit. Goldman Sachs expects operating cash flow to rise from $280 million this year to $900 million in 2014 to a hefty $1.5 billion by 2015. Much of that should convert into free cash flow as capital spending sharply slows. Shares currently sport a free cash flow yield of 11% based on that 2015 Goldman Sachs projection.