Applied Industrial Technologies Inc. (AIT)
During the last year, Applied Industrial Technologies returned a positive performance of 35.8%, with a high of $176.44 and a low of $119.91. Over the same period, the stock outpaced the S&P 500 index by 15.9%. The company's 50-day average price was $165.46 per share as of January 2024. Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. Based in Cleveland, OH, the mid-cap Consumer Discretionary company has 6,359 full time employees. Applied Industrial Technologies has provided a 0.8% dividend yield over the last 12 months.
Growing Revenues and Healthy Leverage Levels:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,073 | $3,473 | $3,246 | $3,236 | $3,811 | $4,413 |
| Net Margins | 5% | 4% | 1% | 4% | 7% | 8% |
| Net Income (M) | $142 | $144 | $24 | $145 | $257 | $347 |
| Diluted Shares (M) | 39 | 39 | 39 | 39 | 39 | 39 |
| Earnings Per Share | $3.61 | $3.68 | $0.62 | $3.68 | $6.58 | $8.84 |
| EPS Growth | n/a | 1.94% | -83.15% | 493.55% | 78.8% | 34.35% |
| Avg. Price | $65.46 | $55.1 | $59.01 | $90.23 | $105.66 | $135.28 |
| P/E Ratio | 17.93 | 14.81 | 95.18 | 24.19 | 15.79 | 15.3 |
| FCF (M) | $124 | $162 | $277 | $226 | $169 | $317 |
| CAPEX (M) | $23 | $19 | $20 | $16 | $18 | $26 |
| EV (M) | $3,419 | $2,956 | $2,929 | $4,149 | $4,591 | $5,491 |
| EV / EBITDA | 13.26 | 10.72 | 26.59 | 18.34 | 12.1 | 10.9 |
| Total Debt (M) | $964 | $958 | $934 | $828 | $689 | $622 |
| Net Debt / EBITDA | 3.43 | 3.01 | 5.85 | 2.98 | 1.38 | 0.52 |
| Current Ratio | 2.75 | 2.72 | 2.7 | 2.86 | 3.18 | 3.52 |
A Lower P/E Ratio Than Its Sector Average but Trades Above Its Graham Number:
Applied Industrial Technologies has a trailing twelve month P/E ratio of 18.3, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $9.99, the company has a forward P/E ratio of 16.6. The compound average growth rate of the company's historical and projected earnings per share is 15.7%. On this basis, the company's PEG ratio is 1.14. Alternatively, we can use the weighted average of Applied Industrial Technologies and the broader market's estimated 5-year EPS growth rate. This normalized growth rate of 9.7% gives us a PEG ratio of 1.84, which suggests that Applied Industrial Technologies may be overpriced. However, the market is placing a reasonable value on Applied Industrial Technologies's book value, since its P/B ratio of 4.27 is comparable to its sector average of 4.24. The company's shares are currently 92.0% above their Graham number.
Applied Industrial Technologies Has an Analyst Consensus of Some Upside Potential:
There are 3 analysts covering Applied Industrial Technologies, with target prices ranging from $182.0 to $195.0 per share, for an average of $189.0. As of January 2024, the company is trading -12.5% away from its average target price, implying there is an analyst consensus of some upside potential. On average, analysts recommend to buy Applied Industrial Technologies.
At 1.5%, Applied Industrial Technologies has a very low short interest. Institutions own 96.0% of the company's shares, and it has a small amount of insider investors because 1.24% are owned by corporate insiders. Overall, the company's top shareholder is Blackrock Inc., whose 16% stake in the company is worth $1,043,107,549.
