Comparing IHI (OTCMKTS:IHICY) & Nordson (NASDAQ:NDSN)

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

Institutional and Insider Ownership

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

Risk and Volatility

Nordson has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, IHI has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Nordson and IHI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordson	0	6	4	1	2.55
IHI	0	0	0	0	0.00

Nordson presently has a consensus price target of $255.75, suggesting a potential upside of 12.35%. Given Nordson’s stronger consensus rating and higher possible upside, research analysts plainly believe Nordson is more favorable than IHI.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nordson	16.34%	19.45%	9.55%
IHI	6.50%	21.69%	4.70%

Dividends

Nordson pays an annual dividend of $3.28 per share and has a dividend yield of 1.4%. IHI pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Nordson pays out 41.2% of its earnings in the form of a dividend. IHI pays out 13.8% 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. Nordson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordson	$2.69 billion	4.75	$467.28 million	$7.96	28.60
IHI	$10.68 billion	1.53	$744.08 million	$1.16	23.35

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

Summary

Nordson beats IHI on 14 of the 18 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 IHI

IHI Corporation designs and builds engineering solutions in Japan and internationally. The company operates through four segments: Resources, Energy and Environment; Social Infrastructure; Industrial Systems and General-Purpose Machinery; and Aero Engine, Space and Defense. The company engages in the manufacturing, sale, and provision of services related to power systems plants for land use and power systems for chips; carbon solutions comprising boilers and storage facilities; components for nuclear power plants; bridges and water gates, transport systems, shield systems, and concrete construction materials; vehicular turbochargers, parking, heat treatment and surface engineering; transport machineries; logistics and industrial systems; and rotating machineries comprising compressors, separation systems, and turbochargers for ships. It also offers 3D laser radars, X-ray inspection systems, monitoring equipment, oil leak monitors, vibration control systems and seismic isolation floor systems, and disaster prevention equipment; environmental monitoring; cryogenic products, material handling systems, steelmaking equipment, pulp and paper machinery, agricultural machinery, life associated equipment; aero engines; rocket, space utilization, defense, and traffic control systems; and communication, electronic, electric measuring, information processing machines, and other instruments and equipment. In addition, the company sells and rents real estate. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.