Applied Industrial Technologies' (NYSE:AIT) Dividend Will Be Increased To $0.35

Applied Industrial Technologies, Inc.'s (NYSE:AIT) dividend will be increasing from last year's payment of the same period to $0.35 on 31st of May. Even though the dividend went up, the yield is still quite low at only 1.0%.

Check out our latest analysis for Applied Industrial Technologies

Applied Industrial Technologies' Dividend Is Well Covered By Earnings

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, Applied Industrial Technologies' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 2.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 16% by next year, which is in a pretty sustainable range.

Applied Industrial Technologies Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.84 in 2013 to the most recent total annual payment of $1.40. This means that it has been growing its distributions at 5.2% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Applied Industrial Technologies has seen EPS rising for the last five years, at 17% per annum. Applied Industrial Technologies definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Applied Industrial Technologies' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Applied Industrial Technologies for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.