Contrasting Nordson Corporation (NDSN) and Altra Industrial Motion Corp. (AIMC)

Nordson Corporation (NASDAQ: NDSN) and Altra Industrial Motion Corp. (NASDAQ:AIMC) are both industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

65.3% of Nordson Corporation shares are owned by institutional investors. Comparatively, 98.6% of Altra Industrial Motion Corp. shares are owned by institutional investors. 2.2% of Nordson Corporation shares are owned by insiders. Comparatively, 3.2% of Altra Industrial Motion Corp. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Nordson Corporation and Altra Industrial Motion Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nordson Corporation 14.57% 32.99% 10.73%
Altra Industrial Motion Corp. 4.92% 16.30% 6.29%

Earnings and Valuation

This table compares Nordson Corporation and Altra Industrial Motion Corp.’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 3.65 $548.73 million $5.02 25.24
Altra Industrial Motion Corp. $784.57 million 1.79 $110.94 million $1.41 33.97

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

Volatility & Risk

Nordson Corporation has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Altra Industrial Motion Corp. has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500.

Dividends

Nordson Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 0.9%. Altra Industrial Motion Corp. pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Nordson Corporation pays out 23.9% of its earnings in the form of a dividend. Altra Industrial Motion Corp. pays out 48.2% 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Nordson Corporation and Altra Industrial Motion Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordson Corporation 0 3 7 0 2.70
Altra Industrial Motion Corp. 0 3 1 0 2.25

Nordson Corporation presently has a consensus price target of $140.38, suggesting a potential upside of 10.80%. Altra Industrial Motion Corp. has a consensus price target of $48.50, suggesting a potential upside of 1.25%. Given Nordson Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Nordson Corporation is more favorable than Altra Industrial Motion Corp..

Summary

Nordson Corporation beats Altra Industrial Motion Corp. on 12 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 Altra Industrial Motion Corp.

Altra Industrial Motion Corp. is a designer, producer and marketer of a range of mechanical power transmission (MPT) components. The Company operates through three segments: Couplings, Clutches and Brakes; Electromagnetic Clutches and Brakes, and Gearing. It manufactures a range of couplings suitable for various industrial and specialty applications. The Electromagnetic Clutches and Brakes segment products include brakes and clutches that are used to electronically slow, stop, engage or disengage equipment utilizing electromagnetic friction type connections. The Gearing segment product lines include vertical and horizontal gear drives, speed reducers and increasers, high-speed compressor drives, enclosed custom gear drives, various enclosed gear drive and gear motor configurations, and open gearing products, such as spur, helical, worm and miter/bevel gears. Its products are used to control and transmit power and torque in virtually any industrial application involving movement.

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