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Here's Why You Should Buy Applied Industrial (AIT) Stock Now
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Applied Industrial Technologies, Inc (AIT - Free Report) is well poised for growth courtesy of strength across its end markets, strategic acquisitions and focus on improving the product line and operational excellence. The company remains committed on investing in growth opportunities and solidifying its long-term market position.
The company has a market capitalization of $6.7 billion. Over the past six months, it has gained 27.2% compared with the industry’s growth of 8.5%. AIT currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Applied Industrial has been benefiting from strength across the food and beverage, lumber and wood, mining, pulp and paper, energy, utilities and refining end markets. Its Service Center Based Distribution segment is witnessing solid growth in larger national accounts and fluid power aftermarket sales.
Sustained Maintenance, Repair and Operations activity and CapEx spending in process flow infrastructure have been aiding the Engineered Solutions segment. Growth in off-highway mobile and industrial fluid power verticals, as well as higher margin process flow control products and solutions, augur well for the Engineered Solutions segment.
Acquisition Benefits: The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. The acquisitions of Bearing Distributors and Cangro (September 2023) enhanced AIT’s footprint and strategic growth initiatives across the U.S. Southeast and upper Northeast regions. Also, the Advanced Motion Systems (April 2023) buyout expanded its footprint in the upper Northeast region of the United States and bolstered relationships with leading suppliers. In first-quarter fiscal 2024, acquisitions had a positive impact of 1.1% on the company's sales.
Shareholder-Friendly Policies: AIT remains committed to rewarding its shareholders through dividend payouts and share buybacks. For instance, in the first quarter of fiscal 2024, the company rewarded shareholders with dividends of $13.55 million, reflecting an increase of 3.4% year over year. Also, it hiked its quarterly dividend rate by 2.9% in January 2023. In August 2022, its board of directors authorized a new share buyback program to repurchase up to 1.5 million shares of its common stock.
Business Initiatives: Applied Industrial’s investments to expand automation, industrial Internet of Things (IIot), digital offerings and customer development initiatives are likely to be beneficial moving ahead. This apart, it is poised to gain from its focus on improving the product line, value-added services and initiatives to drive operational excellence.
Crane delivered a trailing four-quarter average earnings surprise of 29.8%. In the past 60 days, the Zacks Consensus Estimate for CR’s 2023 earnings has increased 3.7%. The stock has rallied 38.7% in the past six months.
Flowserve has a trailing four-quarter average earnings surprise of 27.3%. The consensus estimate for FLS’ 2023 earnings has increased 2.5% in the past 60 days. Shares of the company have increased 9.5% in the past six months.
Kadant delivered a trailing four-quarter average earnings surprise of 17.3%. In the past 60 days, the consensus estimate for KAI’s 2023 earnings has improved 5.2%. The stock has risen 23.2% in the past six months.
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Here's Why You Should Buy Applied Industrial (AIT) Stock Now
Applied Industrial Technologies, Inc (AIT - Free Report) is well poised for growth courtesy of strength across its end markets, strategic acquisitions and focus on improving the product line and operational excellence. The company remains committed on investing in growth opportunities and solidifying its long-term market position.
The company has a market capitalization of $6.7 billion. Over the past six months, it has gained 27.2% compared with the industry’s growth of 8.5%. AIT currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Applied Industrial has been benefiting from strength across the food and beverage, lumber and wood, mining, pulp and paper, energy, utilities and refining end markets. Its Service Center Based Distribution segment is witnessing solid growth in larger national accounts and fluid power aftermarket sales.
Sustained Maintenance, Repair and Operations activity and CapEx spending in process flow infrastructure have been aiding the Engineered Solutions segment. Growth in off-highway mobile and industrial fluid power verticals, as well as higher margin process flow control products and solutions, augur well for the Engineered Solutions segment.
Acquisition Benefits: The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. The acquisitions of Bearing Distributors and Cangro (September 2023) enhanced AIT’s footprint and strategic growth initiatives across the U.S. Southeast and upper Northeast regions. Also, the Advanced Motion Systems (April 2023) buyout expanded its footprint in the upper Northeast region of the United States and bolstered relationships with leading suppliers. In first-quarter fiscal 2024, acquisitions had a positive impact of 1.1% on the company's sales.
Shareholder-Friendly Policies: AIT remains committed to rewarding its shareholders through dividend payouts and share buybacks. For instance, in the first quarter of fiscal 2024, the company rewarded shareholders with dividends of $13.55 million, reflecting an increase of 3.4% year over year. Also, it hiked its quarterly dividend rate by 2.9% in January 2023. In August 2022, its board of directors authorized a new share buyback program to repurchase up to 1.5 million shares of its common stock.
Business Initiatives: Applied Industrial’s investments to expand automation, industrial Internet of Things (IIot), digital offerings and customer development initiatives are likely to be beneficial moving ahead. This apart, it is poised to gain from its focus on improving the product line, value-added services and initiatives to drive operational excellence.
3 Other Promising Stocks
We have highlighted three other top-ranked stocks, namely Crane Company (CR - Free Report) , Flowserve Corporation (FLS - Free Report) and Kadant Inc. (KAI - Free Report) . While Crane sports a Zacks Rank #1 (Strong Buy), Flowserve and Kadant, each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crane delivered a trailing four-quarter average earnings surprise of 29.8%. In the past 60 days, the Zacks Consensus Estimate for CR’s 2023 earnings has increased 3.7%. The stock has rallied 38.7% in the past six months.
Flowserve has a trailing four-quarter average earnings surprise of 27.3%. The consensus estimate for FLS’ 2023 earnings has increased 2.5% in the past 60 days. Shares of the company have increased 9.5% in the past six months.
Kadant delivered a trailing four-quarter average earnings surprise of 17.3%. In the past 60 days, the consensus estimate for KAI’s 2023 earnings has improved 5.2%. The stock has risen 23.2% in the past six months.