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Nordson Announces Share Repurchase Authorization of $500M

Zacks Equity Research
Nordson Announces Share Repurchase Authorization of $500M

Nordson Corporation NDSN recently announced that its board has approved a share repurchase program authorizing it to buy back an additional $500 million of its shares. Under this program, the company is likely to make share repurchases from time to time in the open market at prevailing market prices.

The timing and amount of share repurchases will depend on certain factors such as share price, market conditions and some other factors. Notably, the company will carry out the repurchase program per the Securities Exchange Act Rules and will fund it through operating cash flows.

The company remains committed toward rewarding its shareholders handsomely through dividend payments and share buybacks. During fiscal 2012-2017, its share repurchases and dividend payments amounted to $1 billion, while in the first nine months of fiscal 2018 (ended July 2018), the company paid dividends of $52.1 million to its shareholders. It's worth noting that Nordson has hiked its quarterly dividend rate by 17% in August, marking the 55th consecutive annual dividend increase.

Moreover, the company stands to benefit from its diversified product portfolio and large customer base in the packaging, nonwovens, electronics, medical, appliances, energy, transportation, building and construction, and general product assembly and finishing industries.

In the past three months, shares of the Zacks Rank #3 (Hold) company have yielded 7.8%, outperforming the industry’s average growth of 5.0%.

Nordson has been successfully capitalizing on its acquisitions by penetrating into unexplored markets and expanding product lines. In this regard, the buyout of certain assets of ACE Production Technologies in January 2017, 100% shares of Plas-Pak Industries and InterSelect GmbH in February 2017, and Advanced Technologies business of Vention Medical in March 2017 are worth mentioning. All these assets have strengthened the company's businesses under the Advanced Technology Systems segment. Notably, in third-quarter fiscal 2018, acquired assets added 1% to the company's sales growth while similar contribution is anticipated for the fiscal fourth quarter.

Key Picks

Some better-ranked stocks in the same space are DXP Enterprises, Inc. DXPE, Barnes Group, Inc. B and Chart Industries, Inc. GTLS. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Barnes Group and Chart Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises surpassed estimates twice in the trailing four quarters with an average beat of 101.32%.

Barnes Group exceeded estimates thrice in the trailing four quarters with an average beat of 6.88%.

Chart Industries surpassed estimates in each of the trailing four quarters with an average beat of 29.36%.

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