APPLIED INDUSTRIAL TECH INC (AIT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AIT - US03820C1053 - Common Stock
259.74 USD
-2.6 (-0.99%)
We assign a fundamental rating of 7 out of 10 to AIT. AIT was compared to 50 industry peers in the Trading Companies & Distributors industry. AIT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, AIT is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- AIT had positive earnings in the past year.
- In the past year AIT had a positive cash flow from operations.
- AIT had positive earnings in each of the past 5 years.
- Each year in the past 5 years AIT had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 12.61%, AIT belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
- The Return On Equity of AIT (21.33%) is better than 80.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 14.92%, AIT belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for AIT is significantly above the industry average of 9.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.61% | ||
| ROE | 21.33% | ||
| ROIC | 14.92% |
ROA(3y)12.69%
ROA(5y)10.99%
ROE(3y)22.64%
ROE(5y)21.17%
ROIC(3y)15.73%
ROIC(5y)14.51%
1.3 Margins
- AIT has a Profit Margin of 8.61%. This is in the better half of the industry: AIT outperforms 74.00% of its industry peers.
- In the last couple of years the Profit Margin of AIT has grown nicely.
- With a decent Operating Margin value of 11.03%, AIT is doing good in the industry, outperforming 72.00% of the companies in the same industry.
- AIT's Operating Margin has improved in the last couple of years.
- AIT has a Gross Margin of 30.44%. This is comparable to the rest of the industry: AIT outperforms 54.00% of its industry peers.
- AIT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.03% | ||
| PM (TTM) | 8.61% | ||
| GM | 30.44% |
OM growth 3Y5.17%
OM growth 5Y9.14%
PM growth 3Y8.43%
PM growth 5Y63.39%
GM growth 3Y1.43%
GM growth 5Y0.88%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AIT is still creating some value.
- The number of shares outstanding for AIT has been reduced compared to 1 year ago.
- AIT has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, AIT has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.16 indicates that AIT is not in any danger for bankruptcy at the moment.
- AIT has a better Altman-Z score (8.16) than 88.00% of its industry peers.
- AIT has a debt to FCF ratio of 1.26. This is a very positive value and a sign of high solvency as it would only need 1.26 years to pay back of all of its debts.
- AIT has a better Debt to FCF ratio (1.26) than 86.00% of its industry peers.
- A Debt/Equity ratio of 0.30 indicates that AIT is not too dependend on debt financing.
- With a decent Debt to Equity ratio value of 0.30, AIT is doing good in the industry, outperforming 64.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | 8.16 |
ROIC/WACC1.55
WACC9.62%
2.3 Liquidity
- AIT has a Current Ratio of 3.55. This indicates that AIT is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 3.55, AIT is doing good in the industry, outperforming 80.00% of the companies in the same industry.
- A Quick Ratio of 2.50 indicates that AIT has no problem at all paying its short term obligations.
- AIT has a better Quick ratio (2.50) than 88.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.55 | ||
| Quick Ratio | 2.5 |
3. Growth
3.1 Past
- AIT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.48%.
- AIT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.58% yearly.
- The Revenue has been growing slightly by 1.88% in the past year.
- The Revenue has been growing slightly by 7.05% on average over the past years.
EPS 1Y (TTM)6.48%
EPS 3Y14.97%
EPS 5Y21.58%
EPS Q2Q%5.02%
Revenue 1Y (TTM)1.88%
Revenue growth 3Y6.19%
Revenue growth 5Y7.05%
Sales Q2Q%8.39%
3.2 Future
- AIT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.18% yearly.
- Based on estimates for the next years, AIT will show a small growth in Revenue. The Revenue will grow by 5.47% on average per year.
EPS Next Y6.51%
EPS Next 2Y7.54%
EPS Next 3Y8.18%
EPS Next 5YN/A
Revenue Next Year7.51%
Revenue Next 2Y6.4%
Revenue Next 3Y5.47%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 24.71, which indicates a rather expensive current valuation of AIT.
- AIT's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, AIT is valued at the same level.
- A Price/Forward Earnings ratio of 22.19 indicates a rather expensive valuation of AIT.
- The rest of the industry has a similar Price/Forward Earnings ratio as AIT.
- AIT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.71 | ||
| Fwd PE | 22.19 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as AIT.
- Based on the Price/Free Cash Flow ratio, AIT is valued a bit cheaper than 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.53 | ||
| EV/EBITDA | 17.38 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AIT does not grow enough to justify the current Price/Earnings ratio.
- AIT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.8
PEG (5Y)1.15
EPS Next 2Y7.54%
EPS Next 3Y8.18%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.65%, AIT is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 1.31, AIT has a dividend in line with its industry peers.
- With a Dividend Yield of 0.65, AIT pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
5.2 History
- The dividend of AIT has a limited annual growth rate of 5.71%.
- AIT has been paying a dividend for at least 10 years, so it has a reliable track record.
- AIT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.71%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
- 16.64% of the earnings are spent on dividend by AIT. This is a low number and sustainable payout ratio.
- AIT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP16.64%
EPS Next 2Y7.54%
EPS Next 3Y8.18%
APPLIED INDUSTRIAL TECH INC / AIT FAQ
Can you provide the ChartMill fundamental rating for APPLIED INDUSTRIAL TECH INC?
ChartMill assigns a fundamental rating of 7 / 10 to AIT.
Can you provide the valuation status for APPLIED INDUSTRIAL TECH INC?
ChartMill assigns a valuation rating of 3 / 10 to APPLIED INDUSTRIAL TECH INC (AIT). This can be considered as Overvalued.
How profitable is APPLIED INDUSTRIAL TECH INC (AIT) stock?
APPLIED INDUSTRIAL TECH INC (AIT) has a profitability rating of 8 / 10.
Can you provide the financial health for AIT stock?
The financial health rating of APPLIED INDUSTRIAL TECH INC (AIT) is 9 / 10.
How sustainable is the dividend of APPLIED INDUSTRIAL TECH INC (AIT) stock?
The dividend rating of APPLIED INDUSTRIAL TECH INC (AIT) is 5 / 10 and the dividend payout ratio is 16.64%.