Nordson Corporation (NDSN) recently declared that its board of directors have approved a 22% increase in the quarterly dividend rate. This marks the 51st consecutive annual dividend increase for the company. The news has triggered positive reactions in the market, with the share price gaining nearly 2% since Aug 15.
The present quarterly dividend rate stands at 22 cents, up from the prior 18 cents. The new dividend will be paid on Sep 9, 2014 to shareholders of record on Aug 26. The total distribution will amount to $13.9 million.
Nordson Corporation follows a consistent policy of rewarding its shareholders through dividend payments. The revised quarterly rate equates to an annualized dividend rate of 88 cents per share. In 2011−2013, the company’s dividend distributions totaled $104 million.
On Aug 11, Nordson Corporation had announced the acquisition of California-based Avalon Laboratories Holding Corpor., a leading manufacturer of catheters and medical tubing products for cardiology, pulmonology and related applications. The transaction, valued at $180 million, was funded through the company’s existing credit facilities. The acquired assets are anticipated to expand Nordson’s presence in the medical markets through its fluid-management capabilities.
We believe such accretive acquisitions and solid dividend payments reflect Nordson Corporation’s strong cash position. The company is scheduled to release its third-quarter fiscal 2014 (ended Jul 2014) results on Aug 21.
The Zacks Consensus Estimate for Nordson Corporation is pegged at $1.13 for the third quarter, $3.77 for fiscal 2014 and $4.30 for fiscal 2015. These estimates represent year-over-year growth of 13.8%, 11.6% and 13.9% respectively.
With a market capitalization of $5.1 billion, Nordson Corporation currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Blount International Inc. (BLT), DXP Enterprises, Inc. (DXPE) and IDEX Corporation (IEX). While Blount International sports a Zacks Rank #1 (Strong Buy), both DXP Enterprises and IDEX Corporation hold a Zacks Rank #2 (Buy).
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