Analyzing Nordson (NASDAQ:NDSN) and Regal Rexnord (NYSE:RRX)

Nordson (NASDAQ:NDSNGet Free Report) and Regal Rexnord (NYSE:RRXGet Free Report) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Nordson and Regal Rexnord’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nordson 18.23% 20.20% 10.87%
Regal Rexnord -0.48% 9.42% 3.86%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Nordson and Regal Rexnord, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordson 0 2 4 0 2.67
Regal Rexnord 0 0 5 0 3.00

Nordson currently has a consensus price target of $277.83, indicating a potential upside of 19.86%. Regal Rexnord has a consensus price target of $192.00, indicating a potential upside of 36.75%. Given Regal Rexnord’s stronger consensus rating and higher possible upside, analysts plainly believe Regal Rexnord is more favorable than Nordson.

Institutional and Insider Ownership

72.1% of Nordson shares are held by institutional investors. Comparatively, 99.7% of Regal Rexnord shares are held by institutional investors. 0.9% of Nordson shares are held by insiders. Comparatively, 0.8% of Regal Rexnord shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Nordson has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Regal Rexnord has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Dividends

Nordson pays an annual dividend of $2.72 per share and has a dividend yield of 1.2%. Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 1.0%. Nordson pays out 32.4% of its earnings in the form of a dividend. Regal Rexnord pays out -291.7% 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 has increased its dividend for 61 consecutive years. Nordson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Nordson and Regal Rexnord’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nordson $2.63 billion 5.05 $487.49 million $8.39 27.63
Regal Rexnord $6.25 billion 1.49 -$57.40 million ($0.48) -292.50

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

Summary

Nordson beats Regal Rexnord on 10 of the 17 factors compared between the two stocks.

About Nordson

(Get Free Report)

Nordson Corporation engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It operates through three segments: Industrial Precision Solutions; Medical and Fluid Solutions; and Advanced Technology Solutions. The Industrial Precision Solutions segment provides dispensing, coating, and laminating systems for adhesives, lotions, liquids, and fibers to disposable products and roll goods; automated adhesive dispensing systems used in packaged goods industries; components and systems used in the thermoplastic and biopolymer melt stream; precision agriculture spraying solutions; fluid components, such as nozzles, pumps, and filters; and product assembly systems for use in paper and paperboard converting applications, and manufacturing roll goods. It also offers automated and manual dispensing products and systems for cold materials, container coating, liquid finishing, and powder coating, as well as ultraviolet equipment used primarily in curing and drying operations. The Medical and Fluid Solutions segment offers medical devices, including cannulas, catheters, and medical balloons; single-use plastic components; precision manual and semi-automated dispensers; minimally invasive interventional delivery devices; and plastic molded syringes, cartridges, tips, and fluid connection components. The Advanced Technology Solutions segment provides automated dispensing systems for the attachment, protection, and coating of fluids, as well as related gas plasma treatment systems for cleaning and conditioning surfaces; and bond testing and automated optical, acoustic microscopy, and x-ray inspection systems for use in semiconductor and printed circuit board industries. The company markets its products through direct sales force, as well as distributors and sales representatives. Nordson Corporation was founded in 1909 and is headquartered in Westlake, Ohio.

About Regal Rexnord

(Get Free Report)

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.

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