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Up to date on March twenty sixth, 2024 by Bob Ciura
Annually, we individually evaluation every of the Dividend Aristocrats, a bunch of 68 shares within the S&P 500 Index which have raised their dividends for no less than 25 consecutive years.
To make it on the listing of Dividend Aristocrats, an organization should possess a worthwhile enterprise mannequin with a precious model, international aggressive benefits, and the power to face up to recessions. This is the reason the Dividend Aristocrats can proceed to lift their dividends in tough years.
With this in thoughts, we have now created a listing of all 68 Dividend Aristocrats.
You possibly can obtain your free copy of the Dividend Aristocrats listing, together with essential monetary metrics similar to price-to-earnings ratios and dividend yields, by clicking on the hyperlink under:
Disclaimer: Positive Dividend isn’t affiliated with S&P World in any method. S&P World owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s based mostly. Not one of the info on this article or spreadsheet is official knowledge from S&P World. Seek the advice of S&P World for official info.
One of many three latest member to hitch this listing is Nordson Company (NDSN). Nordson has an unimaginable dividend progress observe report, with a outstanding 60 years of consecutive will increase.
This text will focus on the corporate’s enterprise overview, progress prospects, aggressive benefits, and anticipated returns.
Enterprise Overview
Nordson was based in 1954 in Amherst, Ohio by brothers Eric and Evan Nord, however the firm can hint its roots again to 1909 with the U.S. Computerized Firm.
Right now the corporate has operations in over 35 international locations and engineers, manufactures, and markets merchandise used for dishing out adhesives, coatings, sealants, biomaterials, plastics, and different supplies, with purposes starting from diapers and straws to cell telephones and aerospace.
Supply: Investor Presentation
On February twenty first, 2024, Nordson reported first quarter outcomes for the interval ending January thirty first, 2024. (Nordson’s fiscal yr ends October thirty first.) For the quarter, the corporate reported gross sales of $633 million, a 4% enhance in comparison with Q1 2023, pushed by a constructive acquisition affect, offset by natural lower of two%.
The Industrial Precision and Medical and Fluid Options noticed gross sales enhance by 14% and three%, respectively, whereas the Superior Know-how Options phase had gross sales declines of (18%). The corporate generated adjusted earnings per share of $2.21, a 3% enhance in comparison with the identical prior yr interval.
The corporate’s backlog equaled $750 million on the finish of the primary quarter. Administration decreased the highest finish of its gross sales progress steerage to 4% to 7% (from 4% to 9% beforehand) for fiscal 2024 in comparison with fiscal 2023. Moreover, Nordson expects adjusted EPS for FY 2024 to be $10.00 to $10.50.
Progress Prospects
From 2014 by 2023, Nordson grew earnings-per-share by a strong 10% yearly. In its funding thesis, Nordson lists elements similar to best-in-class know-how that reinforces consumer manufacturing whereas reducing prices, a worldwide service mannequin, a balanced revenue stream, and a profitable observe report.
A rising demand for disposable items, productiveness investments, cellular computing, a rise in the usage of medical gadgets, and the manufacturing of light-weight/lean automobiles are all areas of progress for the corporate’s adhesive and coating sectors, and would add to the corporate’s high line.
Nordson will maintain making acquisitions the place it might achieve entry to distinctive precision applied sciences and strengthen its aggressive benefit.
For instance, in 2023 Nordson accomplished its acquisition of the ARAG Group. ARAG is a worldwide market and innovation chief within the growth, manufacturing and provide of precision management programs and sensible fluid parts for agricultural spraying.
Supply: Investor Presentation
Our projection for 2024 earnings, based mostly on administration’s steerage midpoint, is for $10.25 per share.
We additionally venture 9.0% EPS progress over the following 5 years, pushed by a rise in high line income, modest margin enlargement, and the favorable results of acquisitions.
Aggressive Benefits & Recession Efficiency
The aggressive benefit for Nordson lies in its proprietary precision applied sciences. The enterprise provides specialised and important parts utilized in varied manufacturing processes.
This has enabled Nordson to muster an monumental put in base of consumers unfold all around the world. On account of its in depth international presence, Nordson has been capable of diversify its income each geographically and by business and phase.
Nevertheless, this doesn’t suggest that Nordson is resistant to financial downturns. Earnings decreased by -32% for the yr through the Nice Monetary Disaster earlier than quickly rising. Given the corporate’s reliance on international enlargement, one other recession might scale back its projections for near-term progress.
Valuation & Anticipated Returns
Nordson’s present price-to-earnings ratio is 26.1 based mostly on our 2024 forecasted earnings-per-share of $10.25. This valuation is barely elevated in comparison with the corporate’s trailing decade common P/E ratio of about 23.0. We imagine that 24 instances earnings is an affordable honest worth estimate for Nordson given its strong prospects.
Given shares commerce above our honest worth estimate as we speak, Nordson inventory might expertise losses of roughly 1.7% per yr over the following 5 years from a declining a number of.
Nordson additionally sports activities a 1% dividend yield. The dividend has elevated yearly for 60 years. Moreover, we forecast a payout ratio of solely 27% for 2024, leaving ample room for continued will increase within the years forward.
Combining the corporate’s 1% dividend yield with the 9.0% forecasted EPS progress fee, and the potential valuation headwind, we see Nordson inventory producing complete returns of 8.3% per yr within the intermediate time period. In consequence, Nordson receives a maintain ranking at the moment.
Closing Ideas
The corporate’s progress prospects appear promising, and Nordson has a powerful observe report by way of earnings and dividends prior to now. Nevertheless, the corporate is at present buying and selling at a excessive degree, which reduces the attractiveness of the inventory.
The corporate could proceed its unimaginable earnings-per-share progress this yr, or it might take a breather and stay flat. Nevertheless, we imagine Nordson will proceed rising over the long-term. This long-term earnings progress, coupled with the very conservative dividend payout ratio, ought to see the corporate rising its dividend for a lot of extra years forward.
Moreover, the next Positive Dividend databases include essentially the most dependable dividend growers in our funding universe:
In case you’re on the lookout for shares with distinctive dividend traits, take into account the next Positive Dividend databases:
The key home inventory market indices are one other strong useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].
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