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Here's Why Investing in Applied Industrial (AIT) Makes Sense
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Applied Industrial Technologies, Inc. (AIT - Free Report) currently boasts robust prospects on strength in its businesses, growth initiatives, acquired assets and a sound capital-deployment strategy.
Image Source: Zacks Investment Research
The Zacks Rank #1 (Strong Buy) player has a market capitalization of $3.6 billion. In the past year, the stock has gained 9% against the industry’s decline of 19.6%.
Let’s delve into the factors that make the company a smart investment choice at the moment.
Business Strength: Applied Industrial stands to benefit from strength in its end markets, including life sciences, technology, off-highway mobile, pulp & paper, metals, lumber & wood, industrial machinery and others in the quarters ahead. Also, its focus on pricing and cross-selling actions and growth initiatives are likely to be tailwinds. For fiscal 2022 (ending June 2022), the company predicts organic sales growth of 13.6-14.1% and total revenue growth of 14.8-15.3% on a year-over-year basis.
Benefits From Acquired Assets: It intends to strengthen and expand its businesses through the addition of assets. The company’s R.R. Floody acquisition (August 2021) helped it in enhancing its product offerings in the automation technology space. Also, its buyout of Gibson (January 2021) added value to its automation solution offerings. Acquisitions had a positive contribution of 0.4% to AIT’s revenues in third-quarter fiscal 2022 (ended March 2022).
Investments & Initiatives: Applied Industrial’s value-added services, product innovation and cost-saving efforts and initiatives to drive its operational excellence are anticipated to be tailwinds in the quarters ahead. Also, AIT’s investments in customer development initiatives, automation expansion, IIot and digital offerings are likely to be beneficial.
Rewards to Shareholders: AIT remains focused on rewarding its shareholders through share-repurchase programs and dividend payouts. For the nine months of fiscal 2022, AIT paid out dividends worth $38.6 million and repurchased shares worth $13.6 million. Also, in January 2022, it hiked its quarterly dividend rate by 3%. Exiting the fiscal third quarter, AIT had 318,000 shares left for repurchase under its share repurchase program.
Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for fiscal 2022 earnings has increased from $5.89 to $6.24 on one upward estimate revision versus none downward. The consensus estimate for fiscal 2023 (ending June 2023) earnings has been raised from $6.26 to $6.90 on one northward estimate revision against none southward.
Other Key Picks
Some other top-ranked companies from the same space are discussed below:
In the past 60 days, the stock’s earnings estimates have increased 9.9% for fiscal 2023 (ending March 2023). The same has declined 7.5% in the past year.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX delivered a trailing four-quarter earnings surprise of 2.8%, on average.
IDEX’s earnings estimates have increased 3.2% for 2022 in the past 60 days. Its shares have declined 18.1% in the past year.
Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 4.5%, on average.
In the past 60 days, NDSN’s earnings estimates have increased 3% for 2022. The stock has declined 8.9% in the past year.
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Here's Why Investing in Applied Industrial (AIT) Makes Sense
Applied Industrial Technologies, Inc. (AIT - Free Report) currently boasts robust prospects on strength in its businesses, growth initiatives, acquired assets and a sound capital-deployment strategy.
Image Source: Zacks Investment Research
The Zacks Rank #1 (Strong Buy) player has a market capitalization of $3.6 billion. In the past year, the stock has gained 9% against the industry’s decline of 19.6%.
Let’s delve into the factors that make the company a smart investment choice at the moment.
Business Strength: Applied Industrial stands to benefit from strength in its end markets, including life sciences, technology, off-highway mobile, pulp & paper, metals, lumber & wood, industrial machinery and others in the quarters ahead. Also, its focus on pricing and cross-selling actions and growth initiatives are likely to be tailwinds. For fiscal 2022 (ending June 2022), the company predicts organic sales growth of 13.6-14.1% and total revenue growth of 14.8-15.3% on a year-over-year basis.
Benefits From Acquired Assets: It intends to strengthen and expand its businesses through the addition of assets. The company’s R.R. Floody acquisition (August 2021) helped it in enhancing its product offerings in the automation technology space. Also, its buyout of Gibson (January 2021) added value to its automation solution offerings. Acquisitions had a positive contribution of 0.4% to AIT’s revenues in third-quarter fiscal 2022 (ended March 2022).
Investments & Initiatives: Applied Industrial’s value-added services, product innovation and cost-saving efforts and initiatives to drive its operational excellence are anticipated to be tailwinds in the quarters ahead. Also, AIT’s investments in customer development initiatives, automation expansion, IIot and digital offerings are likely to be beneficial.
Rewards to Shareholders: AIT remains focused on rewarding its shareholders through share-repurchase programs and dividend payouts. For the nine months of fiscal 2022, AIT paid out dividends worth $38.6 million and repurchased shares worth $13.6 million. Also, in January 2022, it hiked its quarterly dividend rate by 3%. Exiting the fiscal third quarter, AIT had 318,000 shares left for repurchase under its share repurchase program.
Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for fiscal 2022 earnings has increased from $5.89 to $6.24 on one upward estimate revision versus none downward. The consensus estimate for fiscal 2023 (ending June 2023) earnings has been raised from $6.26 to $6.90 on one northward estimate revision against none southward.
Other Key Picks
Some other top-ranked companies from the same space are discussed below:
RBC Bearings Incorporated is presently Zacks #1 Ranked. You can see the complete list of today’s Zacks #1 Rank stocks here. ROLL’s earnings surprise in the last four quarters was 3.4%, on average.
In the past 60 days, the stock’s earnings estimates have increased 9.9% for fiscal 2023 (ending March 2023). The same has declined 7.5% in the past year.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX delivered a trailing four-quarter earnings surprise of 2.8%, on average.
IDEX’s earnings estimates have increased 3.2% for 2022 in the past 60 days. Its shares have declined 18.1% in the past year.
Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 4.5%, on average.
In the past 60 days, NDSN’s earnings estimates have increased 3% for 2022. The stock has declined 8.9% in the past year.