Entering text into the input field will update the search result below

Nordson: A Quality Industrial Growth Name, And Priced Accordingly

Mar. 09, 2021 1:08 PM ETNordson Corporation (NDSN)
Stephen Simpson profile picture
Stephen Simpson


  • Nordson posted particularly impressive incremental margins in the fiscal first quarter, leveraging a modest revenue beat into a sizable operating profit beat.
  • Guidance for the fiscal year was pretty strong, with Nordson set to benefit from a broad industrial recovery and strong demand in electronics.
  • Nordson is almost unassailable from a quality standpoint, but the share prices don't offer much of a bargain today.

It's been much, much too long since I've written on Nordson (NASDAQ:NDSN), but how many different ways can you say "this is a great company and I love the growth opportunities, but I don't really want to buy in at this price?" To that extent, this company is quite similar to names like Graco (GGG) in that it consistently does a good job, though with some cyclicality and not that much fanfare on the Street.

Since I wrote on the company back in 2017 (when I thought it was great but expensive), the stock has generated a total annualized return of 12.6% (including reinvested dividends) - just slightly below the 12.9% return of the S&P 500. This is my issue with overpaying - sometimes, with some companies, it works out, but often there's a price to be paid sooner or later.

This is a great company, and I still like the growth opportunities - particularly in areas like advanced semiconductor fabrication and packaging. I also like how management has expanded the medical business and adjusted the business model (NBS Next) to drive better growth over the next cycle. What I don't like, of course, is the valuation and this is a watchlist name for me for the next market freakout.

Stronger Fiscal First Quarter Results, With More Likely To Come

Nordson started off its fiscal 2021 year on a good note, delivering an impressive beat relative to sell-side earnings expectations. In the context of a broader industrial space where a lot of companies have been a little cautious relative to Street expectations, management also offered pretty solid guidance for the remainder of the year.

Revenue rose a little less than 3% on an organic basis (to $527M), beating by about 3%. The Industrial Precision Solutions (or IPS) business drove the beat with 6% revenue growth (to $288M), 9% better than expected, while Advanced

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You


Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.