Kadant (KAI) and Nordson Corporation (NDSN) Head to Head Analysis
Nordson Corporation (NASDAQ: NDSN) and Kadant (NYSE:KAI) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Nordson Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. Kadant pays an annual dividend of $0.84 per share and has a dividend yield of 0.9%. Nordson Corporation pays out 23.9% of its earnings in the form of a dividend. Kadant pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nordson Corporation has increased its dividend for 3 consecutive years and Kadant has increased its dividend for 3 consecutive years. Nordson Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Nordson Corporation and Kadant’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nordson Corporation||$2.00 billion||3.46||$548.73 million||$5.02||23.89|
|Kadant||$418.86 million||2.57||$67.05 million||$3.03||32.29|
Nordson Corporation has higher revenue and earnings than Kadant. Nordson Corporation is trading at a lower price-to-earnings ratio than Kadant, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for Nordson Corporation and Kadant, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nordson Corporation presently has a consensus target price of $139.71, suggesting a potential upside of 16.51%. Kadant has a consensus target price of $94.00, suggesting a potential downside of 3.93%. Given Nordson Corporation’s higher possible upside, research analysts plainly believe Nordson Corporation is more favorable than Kadant.
This table compares Nordson Corporation and Kadant’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Nordson Corporation has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.
Insider & Institutional Ownership
65.5% of Nordson Corporation shares are held by institutional investors. Comparatively, 90.7% of Kadant shares are held by institutional investors. 2.2% of Nordson Corporation shares are held by insiders. Comparatively, 5.6% of Kadant shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Nordson Corporation beats Kadant on 12 of the 15 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.
Kadant Inc. is a supplier of equipment and components used in process industries. In addition, the Company manufactures granules made from papermaking by-products. Its segments include Papermaking Systems and Wood Processing Systems. The Company has a customer base, which includes paper and oriented strand board (OSB) manufacturers. Papermaking Systems segment is engaged in developing, manufacturing, and marketing equipment for the global papermaking and paper recycling industries. Its Papermaking Systems segment consists of product lines, including Stock-Preparation; Doctoring, Cleaning, & Filtration, and Fluid-Handling. The Company develops, manufactures and markets stranders and related equipment used in the production of OSB.
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