The Board of Directors of Nordson Corporation (NDSN) recently endorsed a new share repurchase program worth $300 million. Effective from Dec 16, 2014, the new share repurchase program will replace the erstwhile $200 million program launched in Aug 2013.
New Share Repurchase and Dividend Program
The new share repurchase program will fund benefit schemes of the company and until used for such programs, will be considered as treasury shares. In addition to augmenting shareholders value, the share buyback plan would boost the company’s earnings through lower share count. From fiscal 2011 till the end of fiscal 2014, the company has repurchased approximately 11% of its outstanding shares, at a 28% discounted value of its fourth-quarter fiscal 2014 closing price.
Additionally, Nordson announced a first quarter cash dividend of 22 cents per share. The dividend will be payable on Jan 6, 2015 to shareholders of record on Dec 19. Over the period 2011–2014, Nordson has increased its dividend by 110% from 10.5 cents to 22 cents per share.
Program Announcement Insights
Nordson aims to create higher value for its stakeholders on the back of balanced capital allocation strategies and prospective long-term corporate level growth initiatives. The company consistently attempts to improve its dividend and share repurchasing strategy through lucrative organic and inorganic growth prospects. Such trading opportunities are funded by adequate cash reserves of the organization.
Moving Forward
Since its inception in 1954, Nordson has been successfully catering to its global clientele by providing them with efficient precision technology solutions. The company designs, produces and trades qualitatively differentiated systems and products used for polymers, biomaterials, adhesives and sealants.
Nordson is delivering higher utility to its stakeholders through improved dividend, share repurchase and product offerings in the market. Such initiatives are consistently augmenting the brand value of the company and hence, are expected to enhance its revenue and earnings in the upcoming quarter as well.
With a market capitalization of 4.87 billion, Nordson currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry include Blount International Inc. (BLT), The Babcock & Wilcox Company (BWC) and Barnes Group Inc. (B). Blount International currently sports a Zacks Rank #1 (Strong Buy), while both Babcock & Wilcox Company and Barnes Group carry a Zacks Rank #2 (Buy).
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