Dividend Kings In Focus: Nordson Corporation

Updated on July 22th, 2025 by Felix Martinez

Nordson Corporation (NDSN) has a dividend track record that few companies can rival. The company has increased its dividend for 61 consecutive years, ranking it among the longest dividend growth streaks in the entire market.

That puts Nordson among the elite Dividend Kings, a small group of stocks that have increased their payouts for at least 50 consecutive years. You can see the complete list of all 55 Dividend Kings here.

Additionally, we created a list of all the Dividend Kings along with important financial metrics such as P/E ratios and current dividend yields. You can access your copy of the Dividend Kings sheet by clicking on the link below:

Dividend Kings have the longest track records when it comes to rewarding shareholders with cash, and Nordson is no different.

Nordson does not have a household name and may not be well-known among investors. However, the company has a long and successful history of increasing its dividend.

Nordson has been a high-growth company for many years. In this article, we’ll examine the business and its prospects for investment.

Business Overview

Nordson was founded in 1954 in Amherst, Ohio; however, the company can trace its roots back to 1909 as the U.S. Automatic Company. That enterprise specialized in making screw machine parts for the fledgling automotive industry, but in the 1930s, the company shifted to producing more high-precision parts, which you would probably associate with the Nordson of today.

Then, in 1954, Nordson was established as a division of the U.S. Automatic Company through the acquisition of patents covering the “hot airless” method of spraying paint and other coating materials. The rest, as they say, is history, as Nordson has grown to approximately $2.7 billion in annual revenue and trades with a market capitalization of just over $12.1 billion.

Nordson engineers, manufactures, and markets unique products used to dispense, apply, and control adhesives, sealants, polymers, coatings, and other fluids, as well as to test for quality and treat and cure surfaces.

The company’s products are found all over the world, sold primarily by a direct, global sales force, and offer custom solutions to their customers’ engineering problems. Nordson has established a reputation over the past five decades for delivering quality and value through its diverse range of solutions.

The company has a highly diverse customer base:

Source: Investor Presentation

Nordson is divided into three business segments: Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. The first segment comprises adhesives, coatings, paints, finishes, and sealants.

The Medical and Fluid Solutions segment contains products such as plastic tubing, balloons, catheters, fluid connection components, and syringes. The Advanced Technology Solutions segment comprises electronic processing systems.

Nordson’s revenue mix is highly diversified, with approximately 44% of its revenue coming from the U.S. The remainder is from a wide variety of global customers, offering Nordson not only a diverse customer base but also diversity in terms of currencies. We note that this opens the company’s results up to currency volatility, which the markets have experienced in recent years.

The U.S. is Nordson’s largest market in terms of geographic presence, but the Asia-Pacific and European markets aren’t far behind. Nordson is a truly global company.

Source: Investor Presentation

In terms of product type, Nordson generates about 53% of its sales from industrial precision solutions, which is a relatively attractive area of focus because a great portion of this revenue is recurring in nature. Separately, Nordson generates the balance of its sales from medical fluid solutions and advanced technology solutions.

Growth Prospects

Between 2010 and 2019, Nordson more than doubled its revenue and grew its earnings per share at an average annual rate of 11.3%. The company stumbled in 2020, with a 7% decline in earnings per share. Management attributed the lackluster performance to the challenging global economic environment amid the coronavirus pandemic.

However, the company remained highly profitable even during the worst of the pandemic, and only experienced a mild decline in earnings per share in 2020. Nordson returned to growth in 2021, with an impressive 41% increase in earnings per share. The company followed this up with a 22% improvement in 2022.

Nordson Corporation reported fiscal Q2 2025 sales of $683 million, a 5% increase from $651 million in Q2 2024, driven by an 8% acquisition impact, primarily from the Atrion acquisition, offset by a 2% decline in organic sales and a less than 1% unfavorable currency translation. Net income was $112 million, or $1.97 per diluted share, compared to $118 million, or $2.05 per share, in Q2 2024, while adjusted net income rose to $138 million, with adjusted EPS up 3% to $2.42 from $2.34. EBITDA increased 7% to $217 million, or 32% of sales, from $203 million, or 31% of sales, reflecting operational excellence despite geopolitical uncertainties. The company forecasted Q3 2025 sales of $710–$750 million and adjusted EPS of $2.55–$2.75, supported by a 5% growth in backlog.

Segment performance varied: Industrial Precision Solutions sales fell 8% to $319 million due to a 7% organic decline in polymer processing and industrial coatings, with EBITDA at $114 million (36% of sales). Medical and Fluid Solutions sales increased 20% to $203 million, driven by a 30% acquisition impact, although organic sales declined 10% due to program rationalization and destocking, with EBITDA at $77 million (38% of sales). Advanced Technology Solutions’ sales rose 18% organically to $161 million, fueled by semiconductor and electronics demand, with EBITDA at $40 million (25% of sales). Nordson’s decentralized model and in-region manufacturing supported strong order entry and profitability.

The company maintained a robust balance sheet, with cash and cash equivalents at $130.2 million and total assets of $6.06 billion as of April 30, 2025. Operating cash flow for the first six months was $278.3 million, with $146.3 million used for share repurchases, including $85 million in Q2, and $88.9 million for dividends. Nordson’s strategic focus on differentiated products and acquisitions, coupled with cost optimization, positions it for sustained growth. The company’s ability to deliver strong margins amid market challenges underscores its resilience and commitment to long-term shareholder value.

We believe that Nordson’s long-term growth prospects should remain intact. There are many levers for Nordson’s long-term growth. Nordson is a serial acquirer and has been basically from the beginning, when it was started with the acquisition of patents covering the hot airless method of spraying.

Nordson’s track record with acquisitions is strong, as the company seeks takeover targets that provide a competitive advantage it does not already possess, characterized by high percentages of recurring revenue and cost synergies.

Growth by acquisition is a challenging endeavor for long-term success; however, Nordson has consistently demonstrated its ability to achieve this over the long term. This is a key differentiator for Nordson and should not be overlooked by investors. Nordson has generated strong growth for many years, driven by both internal initiatives and acquisitions.

Source: Investor Presentation

The combination of acquisitions, organic growth, and a focus on continuous improvement drives not only top-line expansion but also margin gains. The continual introduction of new products and technologies drives organic revenue growth. This steady stream of new ideas evolves into new products, driving organic revenue growth.

Additionally, Nordson’s focus on emerging markets has been a significant growth driver and will continue to contribute to future growth. The company’s emerging markets have produced low double-digit revenue growth on average over the past decade, outpacing Nordson’s core markets, the U.S. and Europe.

The growing middle classes in these emerging markets should enable Nordson to continue experiencing impressive rates of organic revenue growth, as well as opening up opportunities for continued, targeted acquisitions in those markets.

Nordson has also been in the process of improving its efficiency through what it calls the Nordson Business System. This is essentially a set of tools and best practices that Nordson has collected over the years, rooted in Lean Six Sigma principles and applied throughout the company in all business units. Nordson closely monitors and measures results against benchmarks, and this focus on efficiency is a growth driver, driving margins.

Nordson has managed to grow its EBITDA margin in tandem with its revenue over the last five years, and the company expects continued growth and margin expansion through 2025.

Source: Investor Presentation

Thanks to all the above growth drivers, we expect Nordson to grow its earnings per share at a 10.0% average annual rate over the next five years.

Competitive Advantages & Recession Performance

Nordson enjoys various competitive advantages, which paint a pretty rosy picture of the company’s position. First, Nordson has an impressive global infrastructure that puts it in a position to not only have a diverse customer base, but also diverse groups of talent.

In addition, its facilities are where its customers are in the world (direct presence in 35 countries), and hence Nordson can react more quickly to product needs. This also affords Nordson an advantage when service is needed, as it has people near its customers wherever they are. This is the sort of thing that drives long-term relationships, which are Nordson’s bread and butter.

That brings us to our next point, which is Nordson’s R&D and patents. Nordson only spends about 3% of its revenue on R&D, but it makes the most of it, filing for dozens of patents each year. Additionally, it acquires patents and businesses that produce critical products, which it can use to supplement its existing lines.

Moreover, Nordson’s extensive installed customer base means that not only does it generate a substantial amount of recurring revenue, but it is also much more challenging for competitors to attract customers away. Switching costs are high for the types of products Nordson sells, and thus, the incumbent in any given space has a significant advantage. Nordson’s installed base offers numerous benefits and is a primary reason why the company has remained successful for decades.

Nordson’s many competitive advantages allow it to hold up reasonably well in recessionary environments; the company’s earnings per share during and after the Great Recession are below:

2007 earnings-per-share of $1.33
2008 earnings-per-share of $1.77 (increase of 33%)
2009 earnings-per-share of $1.20 (decrease of 32%)
2010 earnings-per-share of $2.24 (increase of 87%)

Earnings were volatile during the recession, but overall, Nordson performed very well. There are not many companies with EPS figures that resemble this one during and after the Great Recession, particularly those that manufacture for a living.

Keep in mind that many products of Nordson require capital expenses from its customers, whose budgets tend to be slashed during recessions.

However, Nordson also sells products that are vital to many businesses, and thus, when the dust settles, those orders tend to materialize. Indeed, Nordson’s recession-resistance is surprisingly good.

We saw the company’s resilience to weak economic conditions during the pandemic-impacted period of 2020 and 2021 once again. Among industrial companies in particular, Nordson is quite resilient to weak economic conditions.

Valuation & Expected Returns

We expect Nordson to generate earnings per share of $10.02 this year. As a result, the stock is trading at a forward price-to-earnings ratio of 21.4.

We consider a price-to-earnings ratio of 24 to be fair for Nordson. With shares lower than our fair PE, we see an annualized tailwind of 2.5% from the valuation.

We also expect 10.0% annual EPS growth over the next five years, while the stock offers a dividend yield of 1.5%. Both of these items will add positively to shareholder returns. However, with the yield and valuation headwind largely offsetting each other, we see 14% average total annual returns over the next five years.

Nordson’s strong free cash flow and disciplined approach to acquisitions ensure that the dividend is well-covered. It also happens to grow quickly. Nordson has raised its dividend every year for 61 years.

The company has grown its dividend by 14.0% per year on average over the last decade and by 14.5% per year on average in the previous five years. Therefore, aggressive dividend growth is always possible for the company. Overall, Nordson’s dividend growth streak is outstanding.

A low payout ratio helps the company grow its dividend. With a projected payout ratio of 31% this year, the dividend is well-covered, with ample room for future raises.

Nordson’s approach to spending its cash is somewhat different from that of other companies, as it may vary from year to year, potentially involving stock buybacks, acquisitions, debt repayment, or other activities.

Since 2012, Nordson has allocated its cash in different ways from one year to the next, including more than half of it over this period on acquisitions. There have been years of high levels of buybacks, and years with none.

Overall, Nordson’s results can be uneven, but the company has achieved tremendous success in generating long-term growth.

Final Thoughts

Nordson is a high-quality business with an impressive streak of dividend growth. Nordson isn’t a strong stock for high income. This is somewhat surprising, given that it is a very rare Dividend King; however, the low payout ratio suggests that a generous dividend is not a priority for management.

The priority is growing the business, and this company has done that exceedingly well, producing sector-leading total returns for shareholders. The dividend is expected to rise for many more years, as Nordson has consistently demonstrated over the past 61 years its intention to continue doing so for the foreseeable future.

We currently view Nordson as a buy, given its expected annual total returns of 14%.

The following databases of stocks contain companies with very long dividend or corporate histories, making them ripe for selection by dividend growth investors.

Additional Reading

The following databases of stocks contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors.