Yahoo Finance Here's Why You Should Consider Investing in Applied Industrial (AIT)
Applied Industrial Technologies, Inc. AIT currently boasts solid prospects on a healthy demand environment for its products, acquired assets, growth investments, and shareholder-friendly policies.
The Zacks Rank #2 (Buy) company has a market capitalization of $3.6 billion. In the past month, it has gained 3.8% against the industry’s decline of 5.2%.
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Let’s delve into the factors that make the company investment-worthy at the moment.
Solid Demand for Products: Applied Industrial has been gaining from solid demand for its engineered solutions and automation products & solutions. The company’s healthy cross-selling actions and growth investments have also been proving beneficial. In the fourth quarter of fiscal 2021 (ended Jun 30, 2021) it generated net sales of $895.9 million, reflecting an increase of 19.8% in organic sales. For fiscal 2022 (ending June 2022), the company predicts organic sales to grow 7-9% on a year-over-year basis.
Benefits From Acquired Assets: The company’s R.R. Floody buyout (August 2021) is anticipated to boost its offerings in the automation technology space. Its acquisition of Gibson (January 2021) has been helping it to enhance and expand its range of automation solutions across the U.S. Northeast and Mid-Atlantic markets. Also, the buyout of Advanced Control Solutions (October 2020) has enhanced its range of automation solutions across life sciences, automotive, packaging & logistics, and industrial manufacturing end markets. Acquired assets boosted the company’s sales by 2.1% in the fiscal fourth quarter.
Shareholder-Friendly Policies: Applied Industrial rewards shareholders handsomely through dividend payouts and share buybacks apart from using its fund for acquiring lucrative businesses. In fiscal 2021, the company repurchased shares worth $40.1 million and paid out dividends worth $50.7 million. Also, in January 2021, it announced a 3.1% hike in its quarterly dividend rate.
Initiatives: The company’s investments in expanding automation, IIoT, and digital offerings, as well as its customer development initiatives, are likely to be beneficial, going forward. Also, Applied Industrial’s initiatives to drive operational excellence and cost-control measures are likely to drive its performance. The company expects to generate long-term organic sales growth in the mid-single digits and net sales of $4.5 billion.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Kadant Inc KAI, EnPro Industries, Inc. NPO, and Welbilt, Inc. WBT. While Kadant and EnPro currently sport a Zacks Rank #1 (Strong Buy), Welbilt carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an earnings surprise of 22.26%, on average, in the trailing four quarters.
EnPro pulled off an earnings surprise of 80.64%, on average, in the trailing four quarters.
Welbilt pulled off an earnings surprise of 216.67%, on average, in the trailing four quarters.
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