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Here's Why it is Worth Investing in Applied Industrial (AIT) Now
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Applied Industrial Technologies, Inc. (AIT - Free Report) currently boasts robust prospects on improving demand for its products and solutions, growth investments, acquired assets and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $3.4 billion. Year to date, it has gained 13.4% compared with the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Strong Demand Environment: Applied Industrial has been benefiting from strengthening demand environment for its engineered solutions and automation products & solutions along with its healthy cross-selling actions and growth investments. In fourth-quarter fiscal 2021 (ended Jun 30, 2021) the company’s net sales amounted to $895.9 million, reflecting growth of 23.6% year over year. The results benefited from 19.8% increase in organic sales. For first-quarter fiscal 2022 (ending September 2021), it expects organic sales to grow by mid-teens percentage on a year-over-year basis.
Acquisition Benefits: The company intends to strengthen and expand its businesses through acquisitions. The acquisition of Gibson (January 2021) has been strengthening and expanding its range of automation solutions across the U.S. Northeast and Mid-Atlantic markets. The buyout of R.R. Floody (August 2021) is also likely to enhance its offerings in the automation technology space and boost its presence across the U.S. Midwest market. In fiscal fourth quarter, buyouts had a positive impact of 2.1% on the company’s sales.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share buybacks. In fiscal 2021, the company paid dividends worth $50.7 million, marking an increase of 3.7% year over year. In January 2021, it hiked the quarterly dividend rate by 3.1%. Also, in fiscal 2021, it repurchased shares worth $40.1 million.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2022 (ending June 2022) earnings has trended up from $5.00 to $5.31 on one upward estimate revision against none downward. In addition, the consensus estimate for fiscal 2023 (ending June 2023) earnings increased from $5.42 to $5.81 on one upward estimate revision against none downward.
Image: Bigstock
Here's Why it is Worth Investing in Applied Industrial (AIT) Now
Applied Industrial Technologies, Inc. (AIT - Free Report) currently boasts robust prospects on improving demand for its products and solutions, growth investments, acquired assets and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $3.4 billion. Year to date, it has gained 13.4% compared with the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Strong Demand Environment: Applied Industrial has been benefiting from strengthening demand environment for its engineered solutions and automation products & solutions along with its healthy cross-selling actions and growth investments. In fourth-quarter fiscal 2021 (ended Jun 30, 2021) the company’s net sales amounted to $895.9 million, reflecting growth of 23.6% year over year. The results benefited from 19.8% increase in organic sales. For first-quarter fiscal 2022 (ending September 2021), it expects organic sales to grow by mid-teens percentage on a year-over-year basis.
Acquisition Benefits: The company intends to strengthen and expand its businesses through acquisitions. The acquisition of Gibson (January 2021) has been strengthening and expanding its range of automation solutions across the U.S. Northeast and Mid-Atlantic markets. The buyout of R.R. Floody (August 2021) is also likely to enhance its offerings in the automation technology space and boost its presence across the U.S. Midwest market. In fiscal fourth quarter, buyouts had a positive impact of 2.1% on the company’s sales.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share buybacks. In fiscal 2021, the company paid dividends worth $50.7 million, marking an increase of 3.7% year over year. In January 2021, it hiked the quarterly dividend rate by 3.1%. Also, in fiscal 2021, it repurchased shares worth $40.1 million.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2022 (ending June 2022) earnings has trended up from $5.00 to $5.31 on one upward estimate revision against none downward. In addition, the consensus estimate for fiscal 2023 (ending June 2023) earnings increased from $5.42 to $5.81 on one upward estimate revision against none downward.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Kadant Inc. (KAI - Free Report) , Dover Corporation (DOV - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . While Kadant sports a Zacks Rank #1 (Strong Buy), Dover and EnPro carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an earnings surprise of 22.26%, on average, in the trailing four quarters.
Dover pulled off an earnings surprise of 17.59%, on average, in the trailing four quarters.
EnPro pulled off an earnings surprise of 80.64%, on average, in the trailing four quarters.