Head-To-Head Comparison: Nordson (NASDAQ:NDSN) versus Applied Industrial Technologies (NYSE:AIT)

Nordson (NASDAQ:NDSN) and Applied Industrial Technologies (NYSE:AIT) are both large-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Risk & Volatility

Nordson has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Applied Industrial Technologies has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares Nordson and Applied Industrial Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordson	18.39%	19.73%	9.97%
Applied Industrial Technologies	8.49%	21.74%	12.78%

Institutional and Insider Ownership

72.1% of Nordson shares are owned by institutional investors. Comparatively, 93.5% of Applied Industrial Technologies shares are owned by institutional investors. 0.8% of Nordson shares are owned by company insiders. Comparatively, 1.6% of Applied Industrial Technologies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Nordson and Applied Industrial Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordson	$2.79 billion	5.67	$484.47 million	$9.26	30.65
Applied Industrial Technologies	$4.56 billion	2.41	$392.99 million	$10.51	28.03

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Nordson and Applied Industrial Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordson	0	4	4	0	2.50
Applied Industrial Technologies	0	1	5	0	2.83

Nordson presently has a consensus target price of $311.50, indicating a potential upside of 9.75%. Applied Industrial Technologies has a consensus target price of $295.00, indicating a potential upside of 0.14%. Given Nordson’s higher possible upside, equities research analysts plainly believe Nordson is more favorable than Applied Industrial Technologies.

Dividends

Nordson pays an annual dividend of $3.28 per share and has a dividend yield of 1.2%. Applied Industrial Technologies pays an annual dividend of $2.04 per share and has a dividend yield of 0.7%. Nordson pays out 35.4% of its earnings in the form of a dividend. Applied Industrial Technologies pays out 19.4% 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 62 consecutive years and Applied Industrial Technologies has increased its dividend for 16 consecutive years. Nordson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Applied Industrial Technologies beats Nordson on 9 of the 17 factors compared between the two stocks.

About Nordson

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 Applied Industrial Technologies

Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates in two segments, Service Center Based Distribution, and Engineered Solutions. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides technical support services; engages in the distribution of fluid power and industrial flow control products; advanced automation solutions, including machine vision, robotics, motion control, and smart technologies. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.