Nordson Corporation NDSN has been benefiting from solid momentum in the Industrial Precision Solutions segment, driven by the growing popularity of its packaging and nonwoven product lines. Solid demand for the fluid solutions product line in the industrial and electronics end markets is aiding the Medical and Fluid Solutions segment’s revenues. Driven by strength across its businesses, the company expects sales to be in the range of $2.665-$2.705 billion in fiscal 2024, implying year-over-year growth of 2.1% at the midpoint.
The company intends to strengthen and expand its businesses through buyouts. In August 2024, it completed the acquisition of Atrion Corporation. The inclusion of Atrion’s three major businesses — Halkey Roberts, Atrion Medical and Quest Medical — will enable NDSN to expand its medical offerings in the infusion and cardiovascular therapies market.
Also, the ARAG Group buyout in August 2023 expanded its core capabilities in precision dispensing technology, helping the company foray into the rapidly growing precision agriculture end-market. In the third quarter of fiscal 2024 (ended July 2024), acquired assets boosted total revenues by 4%.
NDSN remains committed to rewarding shareholders through dividend payouts 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. Also, in August 2024, the company hiked its dividend by 15% to 78 cents per share. This marks the its 61st consecutive year of dividend increase.
NDSN Stock’s Price Performance
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In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 11% compared with the industry’s 8.7% growth.
However, lower demand for the company’s electronics processing and x-ray and test product lines is hurting the performance of the Advanced Technology Solutions segment. Also, soft demand for interventional solutions and fluid components product lines remains concerning for the Medical and Fluid Solutions segment.
Rising costs and expenses, if not controlled, are likely to pose a threat to its bottom line too. For instance, in the fiscal third quarter, its cost of sales increased 1.5% year over year due to rising raw material costs. In the same period, its selling and administrative expenses increased 2.4% due to higher acquisition costs. The impact of these expenditures is evident in the rise of the selling and administrative expenses as a percentage of total revenues, which climbed 130 basis points to reach 30.5%.
Key Picks
Some better-ranked companies from the same space are discussed below.
Flowserve Corporation FLS currently carries a Zacks Rank #2 (Buy). 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 has 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%.
RBC Bearings RBC currently carries a Zacks Rank of 2. RBC delivered a trailing four-quarter average earnings surprise of 4.8%.
In the past 60 days, the Zacks Consensus Estimate for RBC Bearings’ fiscal 2025 (ending March 2025) earnings has increased 0.7%.
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