Nordson Corporation (NDSN): A Bull Case Theory

Core Thesis - Nordson Corporation is positioned as a consistent cash generator with a strong reputation, having increased its dividend for 61 consecutive years [2] - The company has shifted from a defensive compounder to a growth-oriented industrial aristocrat under CEO Sundaram Nagarajan, targeting 6-8% growth and 10-12% EPS expansion [2][4] Financial Performance - As of September 30th, Nordson's share was trading at $226.95, with trailing and forward P/E ratios of 28.55 and 20.53 respectively [1] - The company generates an average EBITDA of approximately 30% and has a return on invested capital (ROIC) above 12% [2] Strategic Acquisitions - Notable acquisitions include CyberOptics in 2022 for semiconductor inspection and Atrion in 2024 for medical valves and fluid components, enhancing Nordson's presence in high-growth markets [3] - These acquisitions have increased goodwill from $1.8 billion to $2.8 billion, indicating a strategic redefinition of Nordson's portfolio [3] Market Position and Valuation - Nordson trades at approximately 17-18x EV/EBITDA, which is below peer Graco at around 20x, suggesting potential upside if growth initiatives succeed [3] - The company’s strong balance sheet and consumables-driven revenue model provide stability against cyclical pressures and foreign exchange exposure [4] Growth Potential - If Nordson's growth initiatives are successful, it could be rerated to peer multiples, offering a potential upside of 15-25% [4] - The combination of a long-standing industrial compounder with transformative growth strategies positions Nordson favorably in the market [4]