Up to date on March twenty sixth, 2024 by Bob Ciura
Annually, we individually overview every of the Dividend Aristocrats, a gaggle of 68 shares within the S&P 500 Index which have raised their dividends for a minimum of 25 consecutive years.
To make it on the listing of Dividend Aristocrats, an organization should possess a worthwhile enterprise mannequin with a worthwhile model, international aggressive benefits, and the power to face up to recessions. For this reason the Dividend Aristocrats can proceed to lift their dividends in troublesome years.
With this in thoughts, we’ve created an inventory of all 68 Dividend Aristocrats.
You possibly can obtain your free copy of the Dividend Aristocrats listing, together with necessary monetary metrics comparable to price-to-earnings ratios and dividend yields, by clicking on the hyperlink under:
Disclaimer: Certain Dividend is just not affiliated with S&P World in any means. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain Dividend’s personal overview, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s primarily based. Not one of the data on this article or spreadsheet is official knowledge from S&P World. Seek the advice of S&P World for official data.
One of many three latest member to affix this listing is Nordson Company (NDSN). Nordson has an unimaginable dividend development monitor file, with a exceptional 60 years of consecutive will increase.
This text will focus on the corporate’s enterprise overview, development 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.
In the present day the corporate has operations in over 35 nations and engineers, manufactures, and markets merchandise used for meting out adhesives, coatings, sealants, biomaterials, plastics, and different supplies, with functions 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% improve in comparison with Q1 2023, pushed by a optimistic acquisition affect, offset by natural lower of two%.
The Industrial Precision and Medical and Fluid Options noticed gross sales improve by 14% and three%, respectively, whereas the Superior Expertise Options section had gross sales declines of (18%). The corporate generated adjusted earnings per share of $2.21, a 3% improve in comparison with the identical prior yr interval.
The corporate’s backlog equaled $750 million on the finish of the primary quarter. Administration diminished the highest finish of its gross sales development steering 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.
Development Prospects
From 2014 by 2023, Nordson grew earnings-per-share by a stable 10% yearly. In its funding thesis, Nordson lists components comparable to best-in-class know-how that enhances consumer manufacturing whereas reducing prices, a worldwide service mannequin, a balanced earnings stream, and a profitable monitor file.
A rising demand for disposable items, productiveness investments, cellular computing, a rise in using medical gadgets, and the manufacturing of light-weight/lean automobiles are all areas of development for the corporate’s adhesive and coating sectors, and would add to the corporate’s high line.
Nordson will preserve making acquisitions the place it might probably 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 world market and innovation chief within the improvement, manufacturing and provide of precision management methods and sensible fluid elements for agricultural spraying.
Supply: Investor Presentation
Our projection for 2024 earnings, primarily based on administration’s steering midpoint, is for $10.25 per share.
We additionally challenge 9.0% EPS development over the following 5 years, pushed by a rise in high line income, modest margin growth, and the favorable results of acquisitions.
Aggressive Benefits & Recession Efficiency
The aggressive benefit for Nordson lies in its proprietary precision applied sciences. The enterprise gives specialised and important elements utilized in numerous manufacturing processes.
This has enabled Nordson to muster an huge put in base of consumers unfold all around the world. As a result of its in depth international presence, Nordson has been in a position to diversify its income each geographically and by business and section.
Nonetheless, this doesn’t indicate that Nordson is proof against financial downturns. Earnings decreased by -32% for the yr in the course of the Nice Monetary Disaster earlier than quickly rising. Given the corporate’s reliance on international growth, one other recession may scale back its projections for near-term development.
Valuation & Anticipated Returns
Nordson’s present price-to-earnings ratio is 26.1 primarily based 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 consider that 24 instances earnings is an inexpensive honest worth estimate for Nordson given its stable prospects.
Given shares commerce above our honest worth estimate right now, Nordson inventory may 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 development price, and the potential valuation headwind, we see Nordson inventory producing complete returns of 8.3% per yr within the intermediate time period. Consequently, Nordson receives a maintain ranking at the moment.
Last Ideas
The corporate’s development prospects appear promising, and Nordson has a powerful monitor file by way of earnings and dividends up to now. Nonetheless, the corporate is presently buying and selling at a excessive stage, which reduces the attractiveness of the inventory.
The corporate could proceed its unimaginable earnings-per-share development this yr, or it could take a breather and stay flat. Nonetheless, we consider Nordson will proceed rising over the long-term. This long-term earnings development, 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 Certain Dividend databases include essentially the most dependable dividend growers in our funding universe:
Should you’re on the lookout for shares with distinctive dividend traits, contemplate the next Certain Dividend databases:
The most important home inventory market indices are one other stable useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
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