Xylem (NYSE:XYL) versus Nordson (NASDAQ:NDSN) Financial Survey

Nordson (NASDAQ:NDSN) and Xylem (NYSE:XYL) are both large-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares Nordson and Xylem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordson	$2.79 billion	6.57	$484.47 million	$9.89	33.29
Xylem	$9.04 billion	2.41	$957.00 million	$4.52	21.05

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Nordson and Xylem, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordson	0	3	5	0	2.62
Xylem	2	8	9	0	2.37

Nordson presently has a consensus target price of $326.57, suggesting a potential downside of 0.81%. Xylem has a consensus target price of $121.31, suggesting a potential upside of 27.52%. Given Xylem’s higher probable upside, analysts clearly believe Xylem is more favorable than Nordson.

Dividends

Nordson pays an annual dividend of $3.76 per share and has a dividend yield of 1.1%. Xylem pays an annual dividend of $1.72 per share and has a dividend yield of 1.8%. Nordson pays out 38.0% of its earnings in the form of a dividend. Xylem pays out 38.1% 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 raised its dividend for 62 consecutive years and Xylem has raised its dividend for 2 consecutive years.

Risk and Volatility

Nordson has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Xylem has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

72.1% of Nordson shares are owned by institutional investors. Comparatively, 88.0% of Xylem shares are owned by institutional investors. 0.8% of Nordson shares are owned by company insiders. Comparatively, 0.3% of Xylem shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nordson	18.63%	20.49%	10.88%
Xylem	11.94%	12.06%	7.51%

Summary

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

About Nordson

Nordson Corporation develops and manufactures precision technology used to apply, manage, and inspect materials in industrial and medical applications. Its products help customers dispense adhesives, sealants, coatings, polymers, and other fluids with accuracy and consistency. The company’s offerings include hot-melt adhesive dispensing systems, precision fluid dispensing equipment, material coating and surface-treatment systems, and inspection and testing technologies. Nordson also supplies components and equipment for medical devices and related applications.

About Xylem

Xylem Inc. is a water technology company that develops equipment, software and services for managing water and wastewater. Its offerings include pumps and treatment systems, water-quality testing and analysis, smart meters, monitoring and control technologies, and services for detecting leaks and maintaining water infrastructure. The company serves water and wastewater utilities, industrial and commercial customers, and residential markets. Its technologies support the movement, treatment, testing and efficient use of water across municipal and industrial systems.