10 Best Dividend Growth Stocks to Buy and Hold Now

2. Nordson Corporation (NYSE:NDSN)

5-Year Annual Dividend Growth Rate: 14.2%

Nordson Corporation (NYSE:NDSN) is an American multinational manufacturing company that designs and produces dispensing equipment used for applying adhesives, sealants, coatings, and other materials. The company’s business model allows it to significantly benefit from acquisitions and partnerships. In fact, in fiscal Q2 2024, the company’s sales saw a positive acquisition impact of 5%. In May, the company announced its acquisition of Atrion for $460 per share in cash, totaling approximately $800 million. This acquisition aims to broaden Nordson Corporation’s (NYSE:NDSN) medical portfolio by entering new markets and therapies.

S&P Global Ratings noted that Nordson Corporation’s (NYSE:NDSN) acquisition of Atrion will slightly increase its adjusted debt leverage, but it will remain around the mid-2x level, which is within the acceptable range for its current rating. The firm believes that the company can use its free cash flow and synergy opportunities to keep leverage in the 2x-3x range over the next 12-24 months. Despite recent demand challenges, the company’s manageable leverage and strong EBITDA margins support its ratings. The firm believes that the company will continue using its free cash flow and incremental debt to finance acquisitions, thereby enhancing its organic growth.

In fiscal Q2 2024, Nordson Corporation (NYSE:NDSN) reported revenue of $651 million, which showed a slight 0.08% growth from the same period last year. Year-to-date its operating cash flow came in at $295 million, up from $288 million in the prior-year period. During the quarter, the company returned over $77.7 million to shareholders through dividends.

Nordson Corporation (NYSE:NDSN), one of the best dividend aristocrat stocks on our list, currently offers a quarterly dividend of $0.68 per share. The company holds a 60-year streak of consistent dividend growth and its five-year annual average dividend growth rate comes in at 14.2%. As of July 2, the stock has a dividend yield of 1.20%.

At the end of March 2024, 23 hedge funds tracked by Insider Monkey reported having stakes in Nordson Corporation (NYSE:NDSN), up from 19 in the preceding quarter. The total value of these stakes is more than $76.3 million.