Here's Why Hold Strategy is Apt for Nordson (NDSN) Stock Now
Nordson Corporation NDSN benefits from strong customer demand for medical interventional solutions, polymer processing, and test and inspection product lines despite weakness in the Industrial Precision Solutions segment, rising cost of sales and forex woes.
Let us discuss the factors why investors should retain the stock for the time being.
Growth Catalysts
Investments in Innovation: Nordson’s diversified business structure is a boon. investments in automation, Artificial Intelligence, memory and electronic product innovation are aiding the company. For fiscal 2023 (ending October 2023), NDSN expects adjusted earnings to be $8.90-$9.05 per share. This compares favorably with the fiscal 2022 (ended October 2022) figure of $8.81 per share.
Accretive Acquisition: The company’s expansion initiative is expected to drive growth. NDSN acquired ARAG Group and its subsidiaries in August 2023. The buyout expanded Nordson’s core capabilities in the precision dispense technology and helped the company foray into the rapidly growing, precision agriculture end-market. ARAG is a part of NDSN’s Industrial Precision Solutions segment. In the first nine months of fiscal 2023 (ended July 2023), acquired assets boosted the company’s total revenues by 2.6%.
Rewards to Shareholders: The company continues to increase shareholders’ value through dividend payments. In August 2023, NDSN hiked its dividend by 5% to 68 cents per share. This marks the company’s 60th consecutive year of dividend increase. In the first nine months of fiscal 2023, Nordson paid out dividends of $111.5 million, up 25.8% year over year. In the same period, the company bought back shares worth $78.2 million.
In light of the above-mentioned positives, we believe, investors should retain NDSN stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, shares of the company have gained 8.1%.
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Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Axon Enterprise, Inc. AXON currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter earnings surprise of approximately 60.2%, on average. In the past 60 days, estimates for Axon’s earnings have increased 2.9% for 2023. The stock has soared 80.3% in the past year.
Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank of 1 and a trailing four-quarter earnings surprise of 15%, on average.
AIT’s earnings estimates have increased 1.8% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 50.7% in the past year.
Caterpillar Inc. CAT presently carries a Zacks Rank #2 (Buy). CAT’s earnings surprise in the last four quarters was 18.5%, on average.
In the past 60 days, estimates for Caterpillar’s 2023 earnings have increased 1.3%. The stock has gained 51.3% in the past year.
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Axon Enterprise, Inc (AXON) : Free Stock Analysis Report
