APPLIED INDUSTRIAL TECH INC (AIT) Stock Fundamental Analysis
NYSE:AIT - New York Stock Exchange, Inc. - US03820C1053 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to AIT. AIT was compared to 48 industry peers in the Trading Companies & Distributors industry. AIT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. AIT is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AIT was profitable.
AIT had a positive operating cash flow in the past year.
AIT had positive earnings in each of the past 5 years.
AIT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AIT has a Return On Assets of 12.68%. This is amongst the best in the industry. AIT outperforms 95.83% of its industry peers.
Looking at the Return On Equity, with a value of 21.53%, AIT belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
AIT has a Return On Invested Capital of 14.61%. This is amongst the best in the industry. AIT outperforms 87.50% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AIT is significantly above the industry average of 9.25%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.68% | ||
| ROE | 21.53% | ||
| ROIC | 14.61% |
ROA(3y)12.07%
ROA(5y)8.73%
ROE(3y)23%
ROE(5y)17.48%
ROIC(3y)15.46%
ROIC(5y)13.38%
1.3 Margins
AIT's Profit Margin of 8.62% is fine compared to the rest of the industry. AIT outperforms 79.17% of its industry peers.
AIT's Profit Margin has improved in the last couple of years.
AIT's Operating Margin of 11.04% is fine compared to the rest of the industry. AIT outperforms 68.75% of its industry peers.
AIT's Operating Margin has improved in the last couple of years.
AIT's Gross Margin of 30.09% is in line compared to the rest of the industry. AIT outperforms 45.83% of its industry peers.
AIT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.04% | ||
| PM (TTM) | 8.62% | ||
| GM | 30.09% |
OM growth 3Y10.87%
OM growth 5Y7.5%
PM growth 3Y24.39%
PM growth 5Y15.74%
GM growth 3Y0.8%
GM growth 5Y0.55%
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.
Compared to 5 years ago, AIT has less shares outstanding
Compared to 1 year ago, AIT has an improved debt to assets ratio.
2.2 Solvency
AIT has an Altman-Z score of 7.61. This indicates that AIT is financially healthy and has little risk of bankruptcy at the moment.
AIT has a better Altman-Z score (7.61) than 93.75% of its industry peers.
The Debt to FCF ratio of AIT is 1.43, which is an excellent value as it means it would take AIT, only 1.43 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AIT (1.43) is better than 87.50% of its industry peers.
AIT has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.32, AIT is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.43 | ||
| Altman-Z | 7.61 |
ROIC/WACC1.5
WACC9.72%
2.3 Liquidity
AIT has a Current Ratio of 3.76. This indicates that AIT is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.76, AIT belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
A Quick Ratio of 2.55 indicates that AIT has no problem at all paying its short term obligations.
AIT's Quick ratio of 2.55 is amongst the best of the industry. AIT outperforms 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.76 | ||
| Quick Ratio | 2.55 |
3. Growth
3.1 Past
AIT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.57%.
The Earnings Per Share has been growing by 16.45% on average over the past years. This is quite good.
Looking at the last year, AIT shows a small growth in Revenue. The Revenue has grown by 0.37% in the last year.
AIT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.22% yearly.
EPS 1Y (TTM)3.57%
EPS 3Y28.07%
EPS 5Y16.45%
EPS Q2Q%3.02%
Revenue 1Y (TTM)0.37%
Revenue growth 3Y11.45%
Revenue growth 5Y5.22%
Sales Q2Q%-0.39%
3.2 Future
The Earnings Per Share is expected to grow by 6.53% on average over the next years.
The Revenue is expected to grow by 4.38% on average over the next years.
EPS Next Y2%
EPS Next 2Y5.34%
EPS Next 3Y6.53%
EPS Next 5YN/A
Revenue Next Year1.41%
Revenue Next 2Y4.15%
Revenue Next 3Y4.38%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.47, which indicates a rather expensive current valuation of AIT.
Compared to the rest of the industry, the Price/Earnings ratio of AIT is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.29, AIT is valued a bit cheaper.
A Price/Forward Earnings ratio of 20.33 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 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.47 | ||
| Fwd PE | 20.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AIT is valued a bit more expensive than 70.83% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AIT is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.25 | ||
| EV/EBITDA | 16.03 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AIT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)11.22
PEG (5Y)1.37
EPS Next 2Y5.34%
EPS Next 3Y6.53%
5. Dividend
5.1 Amount
AIT has a yearly dividend return of 0.83%, which is pretty low.
Compared to an average industry Dividend Yield of 2.26, AIT has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.57, AIT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
The dividend of AIT has a limited annual growth rate of 3.44%.
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)3.44%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
14.81% 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.
DP14.81%
EPS Next 2Y5.34%
EPS Next 3Y6.53%
221.75
+6.25 (+2.9%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners95.52%
Inst Owner Change0%
Ins Owners0.89%
Ins Owner Change-1.51%
Market Cap8.51B
Analysts83.33
Price Target297.26 (34.05%)
Short Float %2.42%
Short Ratio2.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
Yearly Dividend1.45
Dividend Growth(5Y)3.44%
DP14.81%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.31%
Min EPS beat(2)3.74%
Max EPS beat(2)6.89%
EPS beat(4)4
Avg EPS beat(4)4.29%
Min EPS beat(4)2.31%
Max EPS beat(4)6.89%
EPS beat(8)8
Avg EPS beat(8)7.5%
EPS beat(12)12
Avg EPS beat(12)11.32%
EPS beat(16)16
Avg EPS beat(16)14.87%
Revenue beat(2)0
Avg Revenue beat(2)-0.74%
Min Revenue beat(2)-1.29%
Max Revenue beat(2)-0.19%
Revenue beat(4)1
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.03%
Max Revenue beat(4)0.3%
Revenue beat(8)4
Avg Revenue beat(8)-0.23%
Revenue beat(12)8
Avg Revenue beat(12)1.86%
Revenue beat(16)12
Avg Revenue beat(16)2.04%
PT rev (1m)-2.39%
PT rev (3m)-0.49%
EPS NQ rev (1m)-0.1%
EPS NQ rev (3m)-1.83%
EPS NY rev (1m)0%
EPS NY rev (3m)1.37%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.68%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.47 | ||
| Fwd PE | 20.33 | ||
| P/S | 1.9 | ||
| P/FCF | 21.25 | ||
| P/OCF | 19.96 | ||
| P/B | 4.75 | ||
| P/tB | 11.4 | ||
| EV/EBITDA | 16.03 |
EPS(TTM)9.87
EY4.45%
EPS(NY)10.91
Fwd EY4.92%
FCF(TTM)10.44
FCFY4.71%
OCF(TTM)11.11
OCFY5.01%
SpS116.7
BVpS46.73
TBVpS19.45
PEG (NY)11.22
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.68% | ||
| ROE | 21.53% | ||
| ROCE | 18.91% | ||
| ROIC | 14.61% | ||
| ROICexc | 16.53% | ||
| ROICexgc | 30.21% | ||
| OM | 11.04% | ||
| PM (TTM) | 8.62% | ||
| GM | 30.09% | ||
| FCFM | 8.94% |
ROA(3y)12.07%
ROA(5y)8.73%
ROE(3y)23%
ROE(5y)17.48%
ROIC(3y)15.46%
ROIC(5y)13.38%
ROICexc(3y)18.18%
ROICexc(5y)15.7%
ROICexgc(3y)32.67%
ROICexgc(5y)30.06%
ROCE(3y)20.01%
ROCE(5y)17.32%
ROICexcg growth 3Y7.79%
ROICexcg growth 5Y4.83%
ROICexc growth 3Y14.57%
ROICexc growth 5Y10.87%
OM growth 3Y10.87%
OM growth 5Y7.5%
PM growth 3Y24.39%
PM growth 5Y15.74%
GM growth 3Y0.8%
GM growth 5Y0.55%
F-Score7
Asset Turnover1.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.43 | ||
| Debt/EBITDA | 1.05 | ||
| Cap/Depr | 48.62% | ||
| Cap/Sales | 0.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.86% | ||
| Profit Quality | 103.76% | ||
| Current Ratio | 3.76 | ||
| Quick Ratio | 2.55 | ||
| Altman-Z | 7.61 |
F-Score7
WACC9.72%
ROIC/WACC1.5
Cap/Depr(3y)43.72%
Cap/Depr(5y)38.4%
Cap/Sales(3y)0.54%
Cap/Sales(5y)0.55%
Profit Quality(3y)82.42%
Profit Quality(5y)311.14%
High Growth Momentum
Growth
EPS 1Y (TTM)3.57%
EPS 3Y28.07%
EPS 5Y16.45%
EPS Q2Q%3.02%
EPS Next Y2%
EPS Next 2Y5.34%
EPS Next 3Y6.53%
EPS Next 5YN/A
Revenue 1Y (TTM)0.37%
Revenue growth 3Y11.45%
Revenue growth 5Y5.22%
Sales Q2Q%-0.39%
Revenue Next Year1.41%
Revenue Next 2Y4.15%
Revenue Next 3Y4.38%
Revenue Next 5YN/A
EBIT growth 1Y1.14%
EBIT growth 3Y23.57%
EBIT growth 5Y13.12%
EBIT Next Year15.09%
EBIT Next 3Y10.12%
EBIT Next 5YN/A
FCF growth 1Y133.29%
FCF growth 3Y15.35%
FCF growth 5Y16.48%
OCF growth 1Y118.51%
OCF growth 3Y15.39%
OCF growth 5Y15.51%