Back to top

Image: Bigstock

Here's Why Investing in Applied Industrial (AIT) Makes Sense

Read MoreHide Full Article

Applied Industrial Technologies, Inc. (AIT - Free Report) is benefiting from strength in its businesses, growth initiatives, acquired assets and a sound capital-deployment strategy.

Zacks Investment Research
Image Source: Zacks Investment Research

The currently Zacks Rank #1 (Strong Buy) player has a market capitalization of $4.4 billion. In the past six months, the stock has gained 15.8% compared with the industry’s growth of 0.5%.

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 technology, metals, refining, chemicals, automation, aggregates, pulp & paper, rubber & plastics, and others in the quarters ahead. Also, its focus on pricing, and cross-selling actions and growth initiatives is likely to be beneficial. For fiscal 2023 (ending June 2023), AIT predicts organic sales to grow in low double digits and total revenues to grow 3-7% from the last fiscal year’s reported figure.

Expansion Initiatives: AIT’s R.R. Floody acquisition (August 2021) enhanced its product offerings in the automation technology space. Also, Applied Industrial’s buyout of Gibson (January 2021) added value to its automation solution offerings. Buyouts had a positive impact of 0.3% on its sales in fourth-quarter fiscal 2022.

Rewards to Shareholders: During fiscal 2022, AIT paid out dividends worth $51.8 million and repurchased shares worth $13.8 million. In January 2022, Applied Industrial hiked its quarterly dividend rate by 3%. Also, AIT launched a share buyback program to repurchase up to 1.5 million shares of its common stock in August 2022.

Northbound Estimate Revision: In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 (ending June 2023) earnings has been revised 5.8% upward.

Zacks Rank & Other Stocks to Consider

Some other top-ranked companies from the industrial products sector are discussed below:

Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank of 1. GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

GEF’s earnings estimates have increased 0.4% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 19.3% in the past six months.

Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.

In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 31.5% in the past six months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Valmont Industries, Inc. (VMI) - free report >>

Applied Industrial Technologies, Inc. (AIT) - free report >>

Greif, Inc. (GEF) - free report >>

Published in