Nordson Corporation NDSN is well-poised for growth, courtesy of strength across its businesses and accretive acquisitions. Handsome rewards to shareholders add to the stock’s appeal.
Headquartered in Westlake, OH, Nordson is one of the leading manufacturers as well as distributors of products and systems designed to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials and other fluids. The company's product line includes single-use components, stand-alone units for low-volume operations and microprocessor-based automated systems for high-speed, high-volume production lines.
Let’s delve into the factors that make this company a smart investment choice at the moment.
Business Strength: Strong momentum in the Industrial Precision Solutions segment is supporting Nordson’s performance. Growing demand for nonwoven product lines in the industrial and consumer non-durable end markets is aiding the segment. Also, the growing need for packaged goods in food and beverage, personal care and cosmetics markets is driving demand for the company's packaging product lines, which also bodes well for the segment.
Expansion Efforts: NDSN is focused on strengthening its competency through acquisitions. In the third quarter of fiscal 2024 (ended July 2024), acquired assets boosted the company’s total revenues by 4%. In August 2024, Nordson completed the acquisition of Atrion Corporation. The inclusion of Atrion’s three major businesses — Halkey Roberts, Atrion Medical and Quest Medical — will enable Nordson to expand its medical offerings in the infusion and cardiovascular therapies market. Management expects the buyout to offer significant operational synergies when combined with its medical business expertise.
In August 2023, the company acquired ARAG Group and its subsidiaries. The acquisition expanded Nordson’s core capabilities in precision dispensing technology, helping it foray into the rapidly growing, precision agriculture end-market. ARAG is part of the Industrial Precision Solutions segment. Also, in November 2022, Nordson acquired CyberOptics Corporation, expanding its semiconductor test and inspection capabilities.
Nordson currently carries a Zacks Rank #2 (Buy). In the past three months, the stock has gained 10.1% compared with the industry’s 3.7% growth.
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Rewards to Shareholders: NDSN continues to increase shareholders’ value through dividend payments and share repurchases. In the first nine months of fiscal 2024, it paid out dividends of $116.8 million, up 4.8% year over year. In the same period, it bought back shares worth $34.1 million. In August 2024, the company hiked its dividend by 15% to 78 cents per share. This marks its 61st consecutive year of dividend increase.
In September 2022, the company’s board authorized the repurchase of up to an additional $500 million in shares on top of the existing share repurchase authorization. Exiting the fiscal third quarter, it had approximately $0.52 million available of the total $1.5 million authorized for share repurchases.
Other Stocks to Consider
Some other top-ranked companies from the same space are discussed below.
Flowserve Corporation FLS currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Crane Company CR presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
Ferguson Enterprises Inc. FERG currently carries a Zacks Rank of 2. FERG delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Ferguson’s fiscal 2025 earnings has remained steady.
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Nordson Corporation (NDSN) : Free Stock Analysis Report
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