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 49 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. AIT is quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years AIT has always been profitable.
In the past 5 years AIT always reported a positive cash flow from operatings.
1.2 Ratios
AIT has a better Return On Assets (12.47%) than 95.92% of its industry peers.
Looking at the Return On Equity, with a value of 21.27%, AIT is in the better half of the industry, outperforming 77.55% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 14.71%, AIT belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AIT is significantly above the industry average of 9.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.47% | ||
| ROE | 21.27% | ||
| ROIC | 14.71% |
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
Looking at the Profit Margin, with a value of 8.64%, AIT is in the better half of the industry, outperforming 79.59% of the companies in the same industry.
AIT's Profit Margin has improved in the last couple of years.
AIT's Operating Margin of 11.17% is fine compared to the rest of the industry. AIT outperforms 73.47% of its industry peers.
AIT's Operating Margin has improved in the last couple of years.
The Gross Margin of AIT (30.33%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of AIT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.17% | ||
| PM (TTM) | 8.64% | ||
| GM | 30.33% |
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.
Compared to 1 year ago, AIT has less shares outstanding
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
AIT has an Altman-Z score of 7.53. This indicates that AIT is financially healthy and has little risk of bankruptcy at the moment.
AIT's Altman-Z score of 7.53 is amongst the best of the industry. AIT outperforms 89.80% of its industry peers.
The Debt to FCF ratio of AIT is 1.30, which is an excellent value as it means it would take AIT, only 1.30 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.30, AIT is in the better half of the industry, outperforming 79.59% of the companies in the same industry.
AIT has a Debt/Equity ratio of 0.31. This is a healthy value indicating a solid balance between debt and equity.
AIT has a Debt to Equity ratio (0.31) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.3 | ||
| Altman-Z | 7.53 |
ROIC/WACC1.49
WACC9.88%
2.3 Liquidity
AIT has a Current Ratio of 3.57. This indicates that AIT is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.57, AIT belongs to the best of the industry, outperforming 81.63% of the companies in the same industry.
AIT has a Quick Ratio of 2.51. This indicates that AIT is financially healthy and has no problem in meeting its short term obligations.
AIT's Quick ratio of 2.51 is amongst the best of the industry. AIT outperforms 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.57 | ||
| Quick Ratio | 2.51 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.40% over the past year.
Measured over the past years, AIT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.45% on average per year.
The Revenue has been growing slightly by 0.50% in the past 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)4.4%
EPS 3Y28.07%
EPS 5Y16.45%
EPS Q2Q%3.63%
Revenue 1Y (TTM)0.5%
Revenue growth 3Y11.45%
Revenue growth 5Y5.22%
Sales Q2Q%1.78%
3.2 Future
The Earnings Per Share is expected to grow by 6.50% on average over the next years.
The Revenue is expected to grow by 4.56% on average over the next years.
EPS Next Y2.12%
EPS Next 2Y4.62%
EPS Next 3Y6.5%
EPS Next 5YN/A
Revenue Next Year0.79%
Revenue Next 2Y3.58%
Revenue Next 3Y4.56%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.74, which indicates a rather expensive current valuation of AIT.
The rest of the industry has a similar Price/Earnings ratio as AIT.
AIT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.25, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 21.05, AIT is valued on the expensive side.
AIT's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.15, AIT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.74 | ||
| Fwd PE | 21.05 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AIT indicates a slightly more expensive valuation: AIT is more expensive than 61.22% of the companies listed in the same industry.
AIT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AIT is cheaper than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.66 | ||
| EV/EBITDA | 15.8 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of AIT may justify a higher PE ratio.
PEG (NY)10.75
PEG (5Y)1.38
EPS Next 2Y4.62%
EPS Next 3Y6.5%
5. Dividend
5.1 Amount
AIT has a yearly dividend return of 0.81%, which is pretty low.
AIT's Dividend Yield is comparable with the industry average which is at 2.70.
Compared to an average S&P500 Dividend Yield of 2.38, AIT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.44%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
AIT pays out 15.57% of its income as dividend. This is a sustainable payout ratio.
The dividend of AIT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP15.57%
EPS Next 2Y4.62%
EPS Next 3Y6.5%
226.52
-0.91 (-0.4%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners95.52%
Inst Owner Change3.01%
Ins Owners0.89%
Ins Owner Change-0.75%
Market Cap8.63B
Analysts83.33
Price Target283.41 (25.11%)
Short Float %3.08%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Yearly Dividend1.45
Dividend Growth(5Y)3.44%
DP15.57%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.24%
Min EPS beat(2)5.58%
Max EPS beat(2)6.89%
EPS beat(4)4
Avg EPS beat(4)5.11%
Min EPS beat(4)3.74%
Max EPS beat(4)6.89%
EPS beat(8)8
Avg EPS beat(8)6.51%
EPS beat(12)12
Avg EPS beat(12)10.59%
EPS beat(16)16
Avg EPS beat(16)13.21%
Revenue beat(2)0
Avg Revenue beat(2)-1.37%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)-1.29%
Revenue beat(4)0
Avg Revenue beat(4)-1.49%
Min Revenue beat(4)-3.03%
Max Revenue beat(4)-0.19%
Revenue beat(8)3
Avg Revenue beat(8)-0.48%
Revenue beat(12)7
Avg Revenue beat(12)1.34%
Revenue beat(16)11
Avg Revenue beat(16)1.81%
PT rev (1m)-3.47%
PT rev (3m)-6.94%
EPS NQ rev (1m)-3.63%
EPS NQ rev (3m)-3.36%
EPS NY rev (1m)0.14%
EPS NY rev (3m)0.11%
Revenue NQ rev (1m)-2.74%
Revenue NQ rev (3m)-2.66%
Revenue NY rev (1m)-0.67%
Revenue NY rev (3m)-0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.74 | ||
| Fwd PE | 21.05 | ||
| P/S | 1.92 | ||
| P/FCF | 19.66 | ||
| P/OCF | 18.57 | ||
| P/B | 4.72 | ||
| P/tB | 11.03 | ||
| EV/EBITDA | 15.8 |
EPS(TTM)9.96
EY4.4%
EPS(NY)10.76
Fwd EY4.75%
FCF(TTM)11.52
FCFY5.09%
OCF(TTM)12.2
OCFY5.39%
SpS118.16
BVpS47.99
TBVpS20.54
PEG (NY)10.75
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.47% | ||
| ROE | 21.27% | ||
| ROCE | 19.03% | ||
| ROIC | 14.71% | ||
| ROICexc | 16.97% | ||
| ROICexgc | 31.24% | ||
| OM | 11.17% | ||
| PM (TTM) | 8.64% | ||
| GM | 30.33% | ||
| FCFM | 9.75% |
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-Score6
Asset Turnover1.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.3 | ||
| Debt/EBITDA | 1.02 | ||
| Cap/Depr | 45.27% | ||
| Cap/Sales | 0.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.99% | ||
| Profit Quality | 112.9% | ||
| Current Ratio | 3.57 | ||
| Quick Ratio | 2.51 | ||
| Altman-Z | 7.53 |
F-Score6
WACC9.88%
ROIC/WACC1.49
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)4.4%
EPS 3Y28.07%
EPS 5Y16.45%
EPS Q2Q%3.63%
EPS Next Y2.12%
EPS Next 2Y4.62%
EPS Next 3Y6.5%
EPS Next 5YN/A
Revenue 1Y (TTM)0.5%
Revenue growth 3Y11.45%
Revenue growth 5Y5.22%
Sales Q2Q%1.78%
Revenue Next Year0.79%
Revenue Next 2Y3.58%
Revenue Next 3Y4.56%
Revenue Next 5YN/A
EBIT growth 1Y4.03%
EBIT growth 3Y23.57%
EBIT growth 5Y13.12%
EBIT Next Year14.5%
EBIT Next 3Y11.05%
EBIT Next 5YN/A
FCF growth 1Y130.2%
FCF growth 3Y15.35%
FCF growth 5Y16.48%
OCF growth 1Y113.3%
OCF growth 3Y15.39%
OCF growth 5Y15.51%