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Nordson's (NDSN) Board Approves 3% Hike in Dividend Rate

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Nordson Corporation (NDSN - Free Report) announced rewards for shareholders in the form of a hike in the quarterly dividend rate on Aug 14. It is worth noting here that the company’s shares gained 0.10% on Aug 14, ending the trading session at $206.67.

We believe that such shareholder-friendly policies of Nordson reflect a strong cash position and belief in profitability growth in the future.

Inside the Headlines

As revealed, the company’s board of directors approved a 3% or 1 cent per share hike in the quarterly dividend rate, which now stands at 39 cents. On an annualized basis, the dividend rose to $1.56 from $1.52 per share. The move marks the company’s consecutive 57th annual dividend increase.

The company will pay out the revised dividend on Sep 8, 2020, to shareholders of record as of Aug 25.

Sound Capital-Allocation Strategies

Nordson follows sound capital-allocation strategies, aiming to improve values for shareholders. It uses free resources for the development of its product line, making acquisitions and rewarding shareholders through share buybacks and dividend payments.

In the first half of fiscal 2020 (ended Apr 30, 2020), the company repurchased shares worth $41.9 million. In the year-ago period, share worth $118.1 million were repurchased by the company. Exiting the second quarter of fiscal 2020, it had $447.7 million worth of share buyback authorization left.

Also, it distributed dividends of $43.9 million in the first half of this year, up from $40.2 million in the first half of fiscal 2019 (ended April 2019). Notably, the quarterly dividend rate was hiked by 9% in August last year.

Zacks Rank, Earnings Estimates and Price Performance

Nordson, with an $11.9-billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company’s diversified business structure, commitment toward rewarding shareholders, solid product offerings, buyouts and Nordson Business System might be beneficial.

The precision dispensing equipment manufacturer is slated to report third-quarter fiscal 2020 (ended July 2020) results on Aug 19, 2020.

The Zacks Consensus Estimate for earnings for the fiscal third quarter is pegged at $1.34, reflecting growth of 4.7% from the 60-day-ago figure. Estimates for fiscal 2020 (ending October 2020) have been raised by 1.7% in the past 60 days to $5.41 per share, while that for fiscal 2021 (ending October 2021) grew by 1.6% to $6.39.

In the past three months, the company’s shares have gained 19.4% against the industry’s growth of 23.1%.





 

Other Key Picks

Some other top-ranked stocks in the industry are Chart Industries, Inc. (GTLS - Free Report) , Altra Industrial Motion Corp. (AIMC - Free Report) and Graco Inc. (GGG - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Graco carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these companies improved for the current year. Further, earnings surprise for the last reported quarter was 46.51% for Chart Industries, 76.47% for Altra Industrial and 37.04% for Graco.

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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