Nordson Corp's Dividend Analysis
Understanding the Dividend Performance of Nordson Corp (NASDAQ:NDSN)
Nordson Corp (NASDAQ:NDSN) recently announced a dividend of $0.68 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-18. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Nordson Corp's dividend performance and assess its sustainability.
What Does Nordson Corp Do?
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Nordson is a manufacturer of equipment (including pumps, valves, dispensers, applicators, filters, and pelletizers, among other equipment) used for dispensing adhesives, coatings, sealants, and other materials. The firm serves a diverse range of end markets including packaging, medical, electronics, and industrial. Nordson Corp's business is organized into three segments: industrial precision solutions, medical and fluid solutions, and advanced technology solutions. The company generated approximately $2.6 billion in revenue in its fiscal 2023.
A Glimpse at Nordson Corp's Dividend History
Nordson Corp has maintained a consistent dividend payment record since 1964. Dividends are currently distributed on a quarterly basis. Nordson Corp has increased its dividend each year since 1964. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 59 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Nordson Corp's Dividend Yield and Growth
As of today, Nordson Corp currently has a 12-month trailing dividend yield of 1.04% and a 12-month forward dividend yield of 1.08%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Nordson Corp's annual dividend growth rate was 19.80%. Extended to a five-year horizon, this rate decreased to 15.60% per year. And over the past decade, Nordson Corp's annual dividends per share growth rate stands at an impressive 13.90%.
Based on Nordson Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Nordson Corp stock as of today is approximately 2.15%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-10-31, Nordson Corp's dividend payout ratio is 0.31.
Nordson Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Nordson Corp's profitability 9 out of 10 as of 2023-10-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Nordson Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Nordson Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Nordson Corp's revenue has increased by approximately 7.90% per year on average, a rate that outperforms approximately 54.26% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Nordson Corp's earnings increased by approximately 17.90% per year on average, a rate that outperforms approximately 60.53% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.00%, which outperforms approximately 54.52% of global competitors.
Next Steps
Considering Nordson Corp's longstanding tradition as a dividend king, its consistent increase in dividend payments, and a solid payout ratio, the company presents a compelling case for value investors focused on income-generating stocks. Coupled with strong profitability and growth metrics, Nordson Corp appears well-positioned to maintain its dividend growth trajectory. Investors seeking to diversify their portfolios with reliable dividend-paying stocks should consider the stability and growth prospects that Nordson Corp offers. Will Nordson Corp continue to uphold its dividend royalty status in the years to come? This is a key question for investors to ponder as they assess the company's future in their investment strategies.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
