 |
| Is Investing in Nordson Corporation (NASDAQ: NDSN) Worth it for Its Next Dividend |
If you're eyeing Nordson's stock, here's an important heads-up: the stock is set to trade ex-dividend in four days. Now, what does that mean? Well, typically, the ex-dividend date comes one business day before the record date. The record date is when a company decides who's eligible to receive a dividend. So, if you want to get in on Nordson's dividend, you'll need to grab some shares before February 16th. The dividend payout is scheduled for March 5th.
Nordson's upcoming dividend is US$0.68 per share, adding to the US$2.72 per share it distributed over the past year. Crunching the numbers, that gives Nordson a trailing yield of 1.0% based on the current share price of US$263.63. While we appreciate companies that pay dividends, it's also crucial to ensure they're not overextending themselves. So, it's wise to check if Nordson has been growing its dividends or if there's a risk they might be cut.
Looking at last year's figures, Nordson paid out about 31% of its profits as dividends. That's a comfortable payout ratio. But remember, cash flow is key when it comes to assessing dividend sustainability. Nordson shelled out around 25% of its free cash flow as dividends, which is considered conservative.
It's reassuring to see that Nordson's dividend is covered by both profit and cash flow. This usually indicates that the dividend is sustainable unless earnings take a nosedive.
Have Earnings and Dividends Been on the Rise?
Companies with steady earnings growth tend to offer the best dividend prospects. Nordson's earnings per share have been climbing at a rate of 5.6% per year over the past five years. Plus, the company reinvests more than half of its earnings back into the business, which supports further growth. This combo of earnings growth and reinvestment bodes well for dividend growth in the future.
One way to gauge a company's dividend potential is by looking at its historical dividend growth rate. Over the past decade, Nordson has upped its dividend by roughly 16% annually. This upward trend in dividends, coupled with earnings growth, suggests that Nordson aims to share its success with shareholders.