Nordson Corporation (NDSN) | Investment Case

1. Company Snapshot

1.a. Company Description

Nordson Corporation engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide.It operates through two segments, Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS).The IPS segment provides dispensing, coating, and laminating systems for adhesives, lotions, liquids, and fibers to disposable products and roll goods; automated adhesive dispensing systems used in packaged goods industries; components and systems used in the thermoplastic melt stream; and product assembly systems for use in paper and paperboard converting applications, and manufacturing roll goods, as well as for the assembly of plastic, metal, and wood products.

It also offers automated and manual dispensing products and systems to apply adhesive and sealant materials; dispensing and curing systems to coat and cure containers; systems to apply liquid paints and coatings to consumer and industrial products; and systems to apply powder paints and coatings to metal, plastic, and wood products, as well as ultraviolet equipment for use in curing and drying operations for specialty coatings, semiconductor materials, and paints.The ATS segment provides automated dispensing systems for the attachment, protection, and coating of fluids, as well as related gas plasma treatment systems for cleaning and conditioning surfaces; precision manual and semi-automated dispensers, minimally invasive interventional delivery devices, plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons, and catheters; and bond testing and automated optical, acoustic microscopy, and x-ray inspection systems for use in semiconductor and printed circuit board industries.The company markets its products through direct sales force, as well as distributors and sales representatives.

Nordson Corporation was founded in 1935 and is headquartered in Westlake, Ohio.

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1.b. Last Insights on NDSN

Nordson's recent performance was driven by strong Q3 earnings, fueled by acquisitions, including Atrion, and robust demand in the Asia-Pacific region. The company's Medical Fluid Solutions and Advanced Technology segments exhibited significant growth. A strategic portfolio realignment aimed at emphasizing differentiated technology and proprietary medical components also contributed positively. Furthermore, Nordson increased its dividend by 5% to 82 cents, marking 62 consecutive years of dividend growth, demonstrating its strong cash flow and commitment to shareholder value.

1.c. Company Highlights

Last Price	239.48
Change Percentage	0.45%
Open	239.13
Previous Close	238.41
Market Cap ( Millions)	13457
Volume	18976
Year High	258.63
Year Low	165.03
M A 50	232.72
M A 200	215.09

FCF Yield	4.04%
Dividend Yield	1.32%
ROE	15.49%
Debt / Equity	74.48%
Net Debt / EBIDTA	252.89%
Price To Book	4.56
Price Earnings Ratio	29.87
Price To FCF	24.77
Price To sales	4.83
EV / EBITDA	18.94

2. Nordson Corporation: A Mixed Bag in Q3

Nordson Corporation reported fiscal 2025 third-quarter sales of $742 million, a 12% increase from the prior year, with organic sales growth of 2% and an 8% contribution from the Atrion acquisition. Adjusted earnings per share (EPS) rose 13% to $2.73, and EBITDA increased 15% to $239 million. The company's free cash flow reached a record $226 million, with a cash flow conversion of 180% of net income. This impressive financial performance was largely driven by the Atrion acquisition, which contributed significantly to the Medical and Fluid Solutions segment.

Publication Date: Aug -22

                                    📋 Highlights
                                    Strong Revenue Growth::
                                                Sales rose 12% YoY to $742M ($742M), driven by 8% acquisition growth and 2% organic growth.
Margin Expansion::
                                                Adjusted EPS increased 13% to $2.73, with EBITDA up 15% to $239M, showing operational efficiency.
Record Free Cash Flow::
                                                FCF hit $226M with 180% net income conversion, supporting $500M new share buyback authorization.
Segment Highlights::
                                                ATS sales surged 17% to $171M (35% EBITDA growth), while MFS grew 32% to $219M (34% EBITDA).
Guidance Confirmed::
                                                Full-year sales guidance slightly below midpoint, but EPS expected to exceed midpoint despite Q4 organic sales flattening.

                                

Segment Performance

The company's segments performed differently during the quarter. Industrial Precision Solutions sales increased 1% to $351 million, with EBITDA flat to the prior year. Medical and Fluid Solutions sales surged 32% to $219 million, driven by the Atrion acquisition, with EBITDA up 34%. Advanced Technology Solutions sales jumped 17% to $171 million, with EBITDA rising 35%. According to Sundaram Nagarajan, the company's management, "ATS has a strong order entry backlog and is well-positioned going into Q4, driven by semiconductor packaging investments and high reliability electronics."

Guidance and Outlook

The company expects to be slightly below the midpoint of its full-year sales guidance and slightly better than the midpoint of its full-year earnings guidance. Organic sales are expected to be flat to slightly down year-over-year in Q4, implying some deceleration on a 3-year stack basis. Despite this, the company feels good about where it is sitting today in terms of order entry and backlog to meet revenue guidance. As Daniel R. Hopgood explains, the expected Q4 deceleration is due to tough year-end comps in some businesses, such as plastics.

Valuation and Shareholder Return

At current prices, Nordson Corporation trades at a P/E ratio of 27.97, a P/B ratio of 4.22, and an EV/EBITDA multiple of 18.32. The stock offers a dividend yield of 1.42% and a free cash flow yield of 3.7%. The company has a history of returning capital to shareholders, with a new authorization to repurchase $500 million in shares, bringing the total remaining authorization to approximately $800 million. Year-to-date, the company has bought back $212 million in shares and reduced its leverage to 2.2x EBITDA.

Growth Prospects

The growth prospects for Advanced Technology Solutions are intact, with no direct evidence of customers pulling forward orders. Demand is broad-based in electronics dispense products, Acoustic, and Optical products. The company feels good about new product launches and solving customers' new problems. With a healthy M&A pipeline, the company will be disciplined around strategic assets and pricing.

Conclusion on Earnings and Estimates

3. NewsRoom

Nordson Corporation $NDSN Shares Sold by Edgestream Partners L.P.

Dec -04

Source: defenseworld.net

Nordson Corporation Declares First Quarter Dividend for Fiscal Year 2026

Dec -03

Source: businesswire.com

Nordson Corporation $NDSN Shares Acquired by Charles Schwab Investment Management Inc.

Nov -29

Source: defenseworld.net

World Investment Advisors Purchases New Shares in Nordson Corporation $NDSN

Nov -06

Source: defenseworld.net

Nordson Corporation $NDSN Shares Bought by Teacher Retirement System of Texas

Nov -04

Source: defenseworld.net

D.A. Davidson & CO. Buys New Position in Nordson Corporation $NDSN

Oct -30

Source: defenseworld.net

Asset Management One Co. Ltd. Has $5.02 Million Stock Position in Nordson Corporation $NDSN

Oct -29

Source: defenseworld.net

Stephens Inc. AR Acquires 173 Shares of Nordson Corporation $NDSN

Oct -26

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.73%)

6. Segments

Industrial Precision Solutions

Expected Growth: 2.5%

Nordson Corporation's Industrial Precision Solutions segment growth of 2.5% is driven by increasing demand for precision dispensing and conformal coating solutions in the electronics and industrial manufacturing industries, as well as the company's strategic acquisitions and investments in emerging technologies such as 3D printing and robotics.

Medical and Fluid Solutions

Expected Growth: 2.8%

Nordson Corporation's Medical and Fluid Solutions segment growth of 2.8% is driven by increasing demand for precision dispensing and fluid management solutions in the medical device and biopharmaceutical industries, as well as growth in the industrial manufacturing sector.

Advanced Technology Solutions

Expected Growth: 3.2%

Nordson's Advanced Technology Solutions segment growth of 3.2% is driven by increasing demand for precision dispensing and conformal coating solutions in the electronics industry, as well as growing adoption of industrial automation and robotics. Additionally, the segment benefits from Nordson's strong brand reputation, innovative product offerings, and strategic acquisitions.

7. Detailed Products

Adhesive Dispensing Systems

Nordson's adhesive dispensing systems provide precise and consistent application of adhesives, sealants, and lubricants in various industries such as automotive, aerospace, and consumer goods.

Coating Systems

Nordson's coating systems provide precise and consistent application of coatings, paints, and inks in various industries such as automotive, aerospace, and industrial manufacturing.

Industrial Coating Systems

Nordson's industrial coating systems provide precise and consistent application of coatings, paints, and inks in various industries such as industrial manufacturing, energy, and construction.

Plasma Treatment Systems

Nordson's plasma treatment systems provide surface modification and cleaning solutions for various industries such as medical, aerospace, and industrial manufacturing.

Precision Dispensing Systems

Nordson's precision dispensing systems provide precise and consistent application of adhesives, sealants, and lubricants in various industries such as automotive, aerospace, and consumer goods.

UV Curing Systems

Nordson's UV curing systems provide high-intensity ultraviolet light for curing inks, coatings, and adhesives in various industries such as printing, packaging, and industrial manufacturing.

X-ray Inspection Systems

Nordson's X-ray inspection systems provide non-destructive testing and inspection solutions for various industries such as aerospace, automotive, and industrial manufacturing.

8. Nordson Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Nordson Corporation operates in a niche market with specialized products, reducing the threat of substitutes. However, the company's products are not entirely unique, and some customers may find alternative solutions.

Bargaining Power Of Customers

Nordson Corporation's customers are diverse and fragmented, reducing their bargaining power. The company's products are often critical to its customers' operations, making it difficult for customers to negotiate prices or switch suppliers.

Bargaining Power Of Suppliers

Nordson Corporation relies on a few key suppliers for critical components, giving them some bargaining power. However, the company's size and diversified supply chain mitigate this risk.

Threat Of New Entrants

The barriers to entry in Nordson Corporation's markets are relatively high, including significant capital expenditures and technical expertise. This reduces the threat of new entrants.

Intensity Of Rivalry

Nordson Corporation operates in a competitive market with several established players, leading to a high intensity of rivalry. The company must continually innovate and improve its products to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	40.07%
Debt Cost	4.13%
Equity Weight	59.93%
Equity Cost	8.95%
WACC	7.02%
Leverage	66.86%

11. Quality Control: Nordson Corporation passed 7 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Watts Water Technologies

A-Score: 5.9/10

Value: 2.4

Growth: 6.9

Quality: 8.0

Yield: 1.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

ITT

A-Score: 5.4/10

Value: 2.4

Growth: 6.7

Quality: 7.2

Yield: 2.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

Franklin Electric Co

A-Score: 5.1/10

Value: 3.0

Growth: 6.8

Quality: 6.6

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

IDEX

A-Score: 4.8/10

Value: 3.1

Growth: 4.9

Quality: 7.9

Yield: 3.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

Nordson

A-Score: 4.7/10

Value: 2.4

Growth: 5.0

Quality: 6.8

Yield: 2.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

Flowserve

A-Score: 4.7/10

Value: 4.7

Growth: 4.6

Quality: 7.4

Yield: 3.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.03%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.02%

Nordson Corporation - US6556631025

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NDSN

1.c. Company Highlights

Better Quality

Expensive

Less Volatile

Earnings Beats

Revenues Miss

Revenues Beats

Average Quality

Weak Momentum

Earnings Miss

2. Nordson Corporation: A Mixed Bag in Q3

Segment Performance

Guidance and Outlook

Valuation and Shareholder Return

Growth Prospects

Conclusion on Earnings and Estimates

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.73%)

6. Segments

Industrial Precision Solutions

Expected Growth: 2.5%

Medical and Fluid Solutions

Expected Growth: 2.8%

Advanced Technology Solutions

Expected Growth: 3.2%

7. Detailed Products

Adhesive Dispensing Systems

Coating Systems

Industrial Coating Systems

Plasma Treatment Systems

Precision Dispensing Systems

UV Curing Systems

X-ray Inspection Systems

8. Nordson Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Nordson Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

239.48$

Current Price

239.48$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA