NYSE:AIT

Stock Analysis Report

Applied Industrial Technologies

Executive Summary

Applied Industrial Technologies, Inc. distributes industrial products in North America, Australia, New Zealand, and Singapore.


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Applied Industrial Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AIT's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.5%

AIT

-3.8%

US Trade Distributors

-2.8%

US Market


1 Year Return

-30.0%

AIT

-30.8%

US Trade Distributors

-15.9%

US Market

Return vs Industry: AIT matched the US Trade Distributors industry which returned -30.8% over the past year.

Return vs Market: AIT underperformed the US Market which returned -15.9% over the past year.


Shareholder returns

AITIndustryMarket
7 Day-3.5%-3.8%-2.8%
30 Day-24.2%-27.6%-18.8%
90 Day-36.2%-38.2%-24.0%
1 Year-28.5%-30.0%-29.4%-30.8%-14.2%-15.9%
3 Year-25.5%-29.7%-20.8%-24.6%9.9%2.8%
5 Year13.6%2.0%-5.9%-12.9%27.2%13.3%

Price Volatility Vs. Market

How volatile is Applied Industrial Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Applied Industrial Technologies undervalued compared to its fair value and its price relative to the market?

14.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AIT ($42.62) is trading below our estimate of fair value ($49.88)

Significantly Below Fair Value: AIT is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AIT is poor value based on its PE Ratio (12.4x) compared to the Trade Distributors industry average (9.9x).

PE vs Market: AIT is poor value based on its PE Ratio (12.4x) compared to the US market (12.2x).


Price to Earnings Growth Ratio

PEG Ratio: AIT is poor value based on its PEG Ratio (8.5x)


Price to Book Ratio

PB vs Industry: AIT is overvalued based on its PB Ratio (1.7x) compared to the US Trade Distributors industry average (0.8x).


Next Steps

Future Growth

How is Applied Industrial Technologies forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AIT's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: AIT's earnings (1.4% per year) are forecast to grow slower than the US market (13.4% per year).

High Growth Earnings: AIT's earnings are forecast to grow, but not significantly.

Revenue vs Market: AIT's revenue is expected to decline over the next 3 years (-2.2% per year).

High Growth Revenue: AIT's revenue is forecast to decline over the next 3 years (-2.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AIT's Return on Equity is forecast to be low in 3 years time (11.5%).


Next Steps

Past Performance

How has Applied Industrial Technologies performed over the past 5 years?

12.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AIT has high quality earnings.

Growing Profit Margin: AIT's current net profit margins (3.9%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: AIT's earnings have grown by 12.8% per year over the past 5 years.

Accelerating Growth: AIT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AIT had negative earnings growth (-19.1%) over the past year, making it difficult to compare to the Trade Distributors industry average (5.1%).


Return on Equity

High ROE: AIT's Return on Equity (13.8%) is considered low.


Next Steps

Financial Health

How is Applied Industrial Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: AIT's short term assets ($1.1B) exceed its short term liabilities ($420.7M).

Long Term Liabilities: AIT's short term assets ($1.1B) exceed its long term liabilities ($1.0B).


Debt to Equity History and Analysis

Debt Level: AIT's debt to equity ratio (98.5%) is considered high.

Reducing Debt: AIT's debt to equity ratio has increased from 44.8% to 98.5% over the past 5 years.

Debt Coverage: AIT's debt is well covered by operating cash flow (23.2%).

Interest Coverage: AIT's interest payments on its debt are well covered by EBIT (6.6x coverage).


Balance Sheet

Inventory Level: AIT has a high level of physical assets or inventory.

Debt Coverage by Assets: AIT's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Applied Industrial Technologies's current dividend yield, its reliability and sustainability?

3.00%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AIT's dividend (3%) is higher than the bottom 25% of dividend payers in the US market (2.07%).

High Dividend: AIT's dividend (3%) is low compared to the top 25% of dividend payers in the US market (5.82%).


Stability and Growth of Payments

Stable Dividend: AIT's dividends per share have been stable in the past 10 years.

Growing Dividend: AIT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36%), AIT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AIT's dividends in 3 years are forecast to be well covered by earnings (36.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Neil Schrimsher (55yo)

8.5s

Tenure

US$4,493,377

Compensation

Mr. Neil A. Schrimsher has been the Chief Executive Officer of Applied Industrial Technologies, Inc. since October 25, 2011 and its President since August 2013. Mr. Schrimsher's managerial experience inclu ...


CEO Compensation Analysis

Compensation vs Market: Neil's total compensation ($USD4.49M) is about average for companies of similar size in the US market ($USD4.77M).

Compensation vs Earnings: Neil's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Neil Schrimsher
President8.5yrsUS$4.49m0.37% $6.0m
David Wells
VP, CFO & Treasurer2.67yrsUS$1.15m0.033% $542.0k
Fred Bauer
VP, General Counsel & Secretary18yrsUS$1.23m0.24% $3.9m
Kurt Loring
VP & Chief Human Resource Officer5.75yrsUS$926.62k0.040% $651.6k
Warren Hoffner
VP and GM of Fluid Power & Flow Control16.83yrsUS$912.89k0.074% $1.2m
Ryan Cieslak
Director of Investor Relations & Assistant Treasurer1.08yrsno datano data
Julie Kho
Manager of Corporate Communications & Media Relationsno datano datano data
Joe Mangiapane
Managing Director of Australia & New Zealandno datano datano data
Christopher Macey
Corporate Controller5yrsno data0.010% $172.4k
Mike Allen
President of Applied Industrial Technologiesno datano datano data

5.8yrs

Average Tenure

54yo

Average Age

Experienced Management: AIT's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Neil Schrimsher
President8.5yrsUS$4.49m0.37% $6.0m
Peter Wallace
Independent Chairman of the Board5.5yrsUS$280.03k0.073% $1.2m
Peter Dorsman
Independent Director17.75yrsUS$219.49k0.031% $515.3k
Dan Komnenovich
Independent Director7.75yrsUS$205.74k0.055% $902.9k
Vincent Petrella
Independent Director7.75yrsUS$224.49k0.041% $671.8k
Robert Pagano
Independent Director2.67yrsUS$205.74k0.016% $262.3k
Joe Raver
Independent Director2.67yrsUS$205.74k0.020% $329.9k
Madhuri Andrews
Independent Director0.67yrno data0.0074% $122.0k
Mary Hall
Independent Director0.67yrno data0.0074% $122.0k

5.5yrs

Average Tenure

59yo

Average Age

Experienced Board: AIT's board of directors are considered experienced (5.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Applied Industrial Technologies, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Applied Industrial Technologies, Inc.
  • Ticker: AIT
  • Exchange: NYSE
  • Founded: 1923
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: US$1.648b
  • Shares outstanding: 38.68m
  • Website: https://www.applied.com

Number of Employees


Location

  • Applied Industrial Technologies, Inc.
  • 1 Applied Plaza
  • Cleveland
  • Ohio
  • 44115
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AITNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
AT4DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0HGRLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
AT4BRSE (Berne Stock Exchange)YesCommon StockCHCHFJan 1968

Biography

Applied Industrial Technologies, Inc. distributes industrial products in North America, Australia, New Zealand, and Singapore. The company offers its products for maintenance, repair, and operational, as well as original equipment manufacturing customers. It operates in two segments, Service Center Based Distribution, and Fluid Power & Flow Control. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, industrial rubber products, linear motion components, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and designs and assembles hydraulic and electro-hydraulic power units and control systems, electronic control systems, pneumatic and electro-pneumatic panels and sub-assemblies, fabricated aluminum assemblies, lubrication systems, hydraulic manifolds, and pump assemblies, as well as provides equipment repair services. It also operates fabricated rubber shops that modify and repair conveyor belts, as well as offer hose assemblies; and rubber service field crews to install and repair conveyor belts and rubber lining at customer locations. In addition, the company rebuilds or assembles speed reducers, pumps, valves, cylinders, and electric and hydraulic motors, as well as custom machining products; and offers technical support services. It offers industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, mining, oil and gas, primary metals, transportation, and utilities, as well as to government entities. Applied Industrial Technologies, Inc. was founded in 1923 and is headquartered in Cleveland, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/05 07:06
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.