Nordson Corporation (NASDAQ: NDSN) and Lydall (NYSE:LDL) are both industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Profitability

This table compares Nordson Corporation and Lydall’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nordson Corporation 14.43% 33.39% 11.08%
Lydall 6.56% 17.43% 9.51%

Dividends

Nordson Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 0.8%. Lydall does not pay a dividend. Nordson Corporation pays out 22.8% of its earnings in the form of a dividend. Lydall has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Nordson Corporation and Lydall, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordson Corporation 0 5 6 0 2.55
Lydall 0 1 1 0 2.50

Nordson Corporation presently has a consensus target price of $113.00, suggesting a potential downside of 11.50%. Lydall has a consensus target price of $63.00, suggesting a potential upside of 35.19%. Given Lydall’s higher probable upside, analysts clearly believe Lydall is more favorable than Nordson Corporation.

Insider & Institutional Ownership

66.4% of Nordson Corporation shares are held by institutional investors. Comparatively, 88.4% of Lydall shares are held by institutional investors. 2.2% of Nordson Corporation shares are held by company insiders. Comparatively, 5.0% of Lydall shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Nordson Corporation has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Lydall has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Earnings & Valuation

This table compares Nordson Corporation and Lydall’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nordson Corporation $1.90 billion 3.87 $497.39 million $4.74 26.94
Lydall $640.28 million 1.25 $92.46 million $2.45 19.02

Nordson Corporation has higher revenue and earnings than Lydall. Lydall is trading at a lower price-to-earnings ratio than Nordson Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Nordson Corporation beats Lydall on 11 of the 17 factors compared between the two stocks.

About Nordson Corporation

Nordson Corporation engineers, manufactures and markets differentiated products and systems used to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids, to test and inspect for quality, and to treat and cure surfaces. The Company’s segments include Adhesive Dispensing Systems, Advanced Technology Systems and Industrial Coating Systems. The Adhesive Dispensing Systems segment delivers its precision dispensing and processing technology to various markets. The Advanced Technology Systems segment integrates its product technologies found in progressive stages of a customer’s production process, such as surface treatment, precisely controlled automated, and post-dispense bond testing, optical inspection and X-ray inspection. The Industrial Coating Systems segment provides equipment used primarily for applying coatings, paint, finishes, sealants and other materials, and for curing and drying of dispensed material.

About Lydall

Lydall, Inc. designs and manufactures specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s segments are Performance Materials, Technical Nonwovens, Thermal/Acoustical Metals and Thermal/Acoustical Fibers. The Performance Materials segment includes filtration, thermal insulation and life sciences filtration businesses. The Technical Nonwovens segment includes its industrial filtration and advanced materials products. The Thermal/Acoustical Metals segment includes its metal parts and related tooling used in automotive applications. The Thermal/Acoustical Fibers segment includes its fiber parts business and related tooling used in automotive applications. Its Filtration products include LydAir MG (Micro-Glass) Air Filtration Media, LydAir MB (Melt Blown) Air Filtration Media and Arioso Membrane Composite Media.

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