Nordson Corporation (NASDAQ:NDSN) could be one of the more underrated dividend-growth stocks in the industrial sector. The company has now raised its dividend for 63 consecutive years, including a notable 15% increase to $0.94 per share announced in August 2026. What makes the story particularly interesting is that Nordson combines this long dividend record with a relatively modest payout, strong cash generation, and a diversified business model built around precision technologies, recurring parts, and consumables. As of August 31, the stock has a dividend yield of 1.17%.
Its latest fiscal Q3 results- with record adjusted EPS and stronger full-year guidance- also suggest the company has the earnings and cash-flow capacity to keep growing the dividend.
Bull Case
Nordson Corporation (NASDAQ:NDSN)’s dividend-growth streak looks increasingly well supported by its cash generation and relatively conservative payout. The biggest positive is that Nordson did not merely maintain its dividend-growth record; it raised the quarterly dividend by 15% to $0.94 per share, marking the 63rd consecutive year of annual increases. A double-digit increase is meaningful because it suggests management remains confident in the company’s ability to generate enough cash to support both the dividend and other capital-allocation priorities.
The dividend also appears to have a substantial earnings cushion. Fiscal Q3 adjusted EPS increased 19% to a record $3.25, while the company raised its full-year adjusted EPS guidance to $11.80-$12.00. At the new quarterly dividend rate, the annualized payout is $3.76 per share, implying that the dividend represents only roughly 31%-32% of the midpoint of management’s adjusted EPS guidance. That leaves considerable room for Nordson to continue investing in the business while still growing the dividend.
Cash flow provides an even stronger argument. Nordson Corporation (NASDAQ:NDSN) generated $570.5 million of operating cash flow during the first nine months of fiscal 2026, up from $516.3 million a year earlier. It paid $137.4 million in dividends during that period. In other words, operating cash flow covered the dividend by more than four times, providing a meaningful cushion for future increases.
Importantly, Nordson is not sacrificing its balance sheet to maintain that dividend. The company repaid $258 million of debt during the first nine months while continuing to pay dividends and repurchase shares. That is a favorable setup for dividend investors because the company is simultaneously returning cash to shareholders and strengthening its financial position.
The latest earnings report also provides some confidence that dividend growth can continue. Backlog was 35% higher year over year, while management raised its full-year outlook. Stronger demand and earnings give Nordson additional capacity to increase its dividend in future years rather than simply preserving the streak with token increases.
Bear Case
The main concern is not the safety of Nordson Corporation (NASDAQ:NDSN)’s dividend today, but whether its dividend-growth rate can remain as strong as investors might expect from the recent 15% increase. A 63-year record is impressive, but dividend streaks are backward-looking. What matters for investors buying the stock today is the future growth of the dividend and the return they receive from it. The new $0.94 quarterly dividend equates to only $3.76 annually, so Nordson remains much more of a dividend-growth investment than a high-current-income investment.
The recent 15% increase could also set a high bar. Q3’s 19% adjusted EPS growth was exceptionally strong, but investors should not automatically assume that earnings- and therefore dividend growth- will continue at that pace. Much of the recent momentum came from Advanced Technology Solutions, where organic sales increased 31% in Q3. By comparison, Industrial Precision Solutions grew organic sales only 3%, while Medical and Fluid Solutions grew 11% organically.
That matters for the dividend because Nordson’s ability to sustain double-digit increases ultimately depends on continued earnings and cash-flow growth. If technology-related demand normalizes, overall earnings growth could slow. Management’s higher full-year guidance is encouraging, but it does not eliminate the possibility of slower growth in subsequent years.
There is also a capital-allocation trade-off. Nordson generated strong cash flow, but it is using that cash for dividends, share repurchases, debt repayment, acquisitions, and investment in the business. During the first nine months, it paid $137.4 million in dividends, repurchased $158.8 million of shares, and repaid $258 million of debt.
That is not currently a problem; in fact, it demonstrates financial flexibility. But if economic conditions weaken or acquisition opportunities become more attractive, management may have to balance dividend growth against other uses of capital. The 63-year streak is likely a high priority, but maintaining a 15% dividend-growth rate is a different question.
Conclusion
Nordson Corporation (NASDAQ:NDSN)’s dividend looks stronger than its relatively low yield might suggest. The 63-year streak is backed by strong cash generation, a modest payout, and a balance sheet that is being strengthened. The latest 15% increase shows management remains confident in future cash flows. While future dividend increases may not match the recent pace, NDSN looks more compelling as a long-term dividend-growth compounder than as a high-yield stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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