Nordson Is Poised To Deliver Strong Organic Growth Fueled by Advanced Technology Solutions

Nordson NDSN is a leading manufacturer of equipment used for dispensing adhesives, coatings, sealants, and other materials. The company enjoys strong market share across its business lines, and its products are often used in niche applications where competition is limited. Nordson differentiates itself by offering highly engineered and customizable solutions which perform a mission-critical role in a customer’s manufacturing process.

Nordson thrives in times of change, as innovation in its end markets drives demand for new and improved solutions. In the long run, we think that Nordson is poised to capitalize on favorable secular trends such as increasing adoption of 5G and autonomous vehicles, which we expect to create new opportunities for its dispensing business. For example, as 5G adoption accelerates, more antennas and other components will be placed in smartphones. Likewise, autonomous vehicles feature more cameras, sensors, and other electronic equipment. We believe that innovation in Nordson’s end markets will create demand for new dispensing equipment, featuring faster speeds and increased precision.

Historically, Nordson has regularly used acquisitions as an engine for growth. In recent years, Nordson has focused on expanding its medical business through M&A, and the company should benefit from favorable secular trends in healthcare, including an aging baby boomer population and growing demand for minimally invasive medical devices. Additionally, recent acquisitions of medical companies have boosted Nordson’s recurring revenue from sales of syringes, cartridges, and other medical device components. Nordson generates healthy cash flows which allow it to compound cash by reinvesting capital in organic growth, driven by introductions of new or refreshed products, as well as tuck-in and bolt-on acquisitions that fit its strategy of selling goods that have a low cost but create added value for customers. Nordson also has a long history of returning cash to shareholders via dividends, having increased its dividend for 59 consecutive years.