Introduction to Nordson Corporation (NDSN)
Nordson Corporation (NDSN) is a global leader in providing precision technology solutions for a wide range of industries, including adhesives, coatings, sealants, and electronics. The company’s products and services are used in diverse applications, including automotive, packaging, medical devices, and consumer goods.
Strengths
One of the key strengths of Nordson is its long-standing commitment to innovation and R&D. The company invests heavily in research and development to create new products, improve existing ones, and expand into new markets. Nordson has a strong portfolio of patents, which helps it to maintain its competitive edge in the industry.
Financials
Nordson’s financial performance has been impressive over the years, with steady revenue growth and profitability. The company’s revenue for the fiscal year 2021 was $2.2 billion, up 7% from the previous year. Net income for the same period was $393 million, an increase of 11% from the previous year.
Nordson has a strong balance sheet, with a debt-to-equity ratio of 0.46 and a current ratio of 2.36. This indicates that the company has a healthy financial position and is able to meet its short-term obligations. Nordson also has a solid cash position, with $421 million in cash and equivalents as of the end of fiscal year 2021.
In terms of valuation, Nordson’s price-to-earnings (P/E) ratio of 38.6 is above the industry average of 27.3. However, this is not unusual for a high-quality, dividend-paying company like Nordson. Investors are willing to pay a premium for companies that have a proven track record of generating steady earnings and increasing their dividend payouts over the years.
Dividends
One of the most attractive features of Nordson for investors is its status as a dividend aristocrat. A dividend aristocrat is a company that has increased its dividend payout for at least 25 consecutive years. Nordson has increased its dividend payout for 59 consecutive years, and has been added to the S&P Dividend Aristocrats list by S&P global in 2023. The company’s current dividend yield is 0.8%, which may seem small, but it is important to note that Nordson has consistently increased its dividend payout over the years and with a sound payout ratio. Furthermore, we forecast a payout ratio of only 28% for 2023, leaving room for continued increases in the years ahead.
Summary
In conclusion, Nordson is a solid investment choice for investors looking for a stable, dividend-paying company with a strong balance sheet and a long history of growth and profitability. The company’s commitment to innovation and R&D, along with its status as a dividend aristocrat, makes it an attractive choice for long-term investors. However, it’s always important to do your own research and consult with a financial advisor before making any investment decisions.
