Nordson Corporation (NDSN), the Ohio-based industrial technology company, is poised to unveil its fourth-quarter earnings after the market closes on Wednesday, December 11th. Analysts are anticipating robust results, projecting earnings per share (EPS) of $2.59, a notable increase from $2.46 in the same period last year. Revenue is also expected to climb, reaching an estimated $736.79 million, compared to $719.31 million in the previous year, according to Benzinga Pro.
Beyond the anticipated strong financial performance, Nordson’s compelling dividend yield is attracting significant investor attention. Currently boasting an annual dividend yield of 1.23%, translating to a quarterly payment of 78 cents per share ($3.12 annually), the company offers a stable income stream. This raises an important question for investors: how can one leverage this dividend yield to generate a substantial passive income?
Leveraging Nordson’s Dividend for Passive Income
Let’s explore how different investment amounts can translate into desired monthly dividend income. To achieve a monthly income of $500 (or $6,000 annually), an investment of approximately $486,269 would be required. This equates to roughly 1,923 shares of NDSN stock. For a more conservative goal of $100 per month ($1,200 annually), the necessary investment drops to approximately $97,355, or around 385 shares.
The calculation is straightforward: divide the desired annual income by the annual dividend per share. Therefore, $6,000 / $3.12 = 1,923 shares for a $500 monthly income and $1,200 / $3.12 = 385 shares for a $100 monthly income.
Understanding Dividend Yield Fluctuations
It’s crucial to remember that dividend yields are not static. They are dynamic figures influenced by both the dividend payment and the stock’s price. The yield is calculated by dividing the annual dividend payment by the current stock price. For instance, if the annual dividend is $2 and the stock price is $50, the yield is 4%. However, if the stock price rises to $60, the yield falls to 3.33%, and conversely, if the price drops to $40, the yield increases to 5%. Similarly, changes in the company’s dividend policy will directly impact the yield. An increase in dividend payments boosts the yield (assuming the stock price remains unchanged), while a decrease has the opposite effect.
Recent Price Action and Outlook
Shares of Nordson experienced a slight dip, closing at $252.87 on Tuesday, down 1%. Investors will undoubtedly be closely watching the upcoming earnings release to gauge future performance and potential impact on the dividend yield. The anticipated strong earnings and the attractive dividend yield make NDSN a compelling investment for those seeking both capital appreciation and consistent passive income. However, as with any investment, thorough due diligence and consideration of individual risk tolerance are essential before making any investment decisions.
