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 6 out of 10 to AIT. AIT was compared to 48 industry peers in the Trading Companies & Distributors industry. AIT gets an excellent profitability rating and is at the same time showing great financial health properties. AIT has a expensive valuation and it also scores bad on growth.
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.
Each year in the past 5 years AIT has been profitable.
Each year in the past 5 years AIT had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AIT (12.47%) is better than 95.83% of its industry peers.
The Return On Equity of AIT (21.27%) is better than 77.08% of its industry peers.
The Return On Invested Capital of AIT (14.71%) is better than 87.50% of its industry peers.
AIT had an Average Return On Invested Capital over the past 3 years of 15.46%. This is significantly above the industry average of 9.84%.
| 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
AIT's Profit Margin of 8.64% is fine compared to the rest of the industry. AIT outperforms 75.00% of its industry peers.
In the last couple of years the Profit Margin of AIT has grown nicely.
Looking at the Operating Margin, with a value of 11.17%, AIT is in the better half of the industry, outperforming 72.92% of the companies in the same industry.
In the last couple of years the Operating Margin of AIT has grown nicely.
Looking at the Gross Margin, with a value of 30.33%, AIT is in line with its industry, outperforming 45.83% of the companies in the same industry.
AIT's Gross Margin has been stable in the last couple of years.
| 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
AIT has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
AIT has less shares outstanding than it did 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
AIT has an Altman-Z score of 8.18. This indicates that AIT is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.18, AIT belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
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.
AIT has a Debt to FCF ratio of 1.30. This is amongst the best in the industry. AIT outperforms 81.25% of its industry peers.
AIT has a Debt/Equity ratio of 0.31. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.31, AIT is in line with its industry, outperforming 58.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.3 | ||
| Altman-Z | 8.18 |
ROIC/WACC1.51
WACC9.72%
2.3 Liquidity
A Current Ratio of 3.57 indicates that AIT has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.57, AIT belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
A Quick Ratio of 2.51 indicates that AIT has no problem at all paying its short term obligations.
AIT has a better Quick ratio (2.51) than 85.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.57 | ||
| Quick Ratio | 2.51 |
3. Growth
3.1 Past
AIT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.40%.
AIT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.45% yearly.
Looking at the last year, AIT shows a small growth in Revenue. The Revenue has grown by 0.50% 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)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
AIT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.62% yearly.
AIT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.95% yearly.
EPS Next Y2.28%
EPS Next 2Y4.43%
EPS Next 3Y6.29%
EPS Next 5Y5.62%
Revenue Next Year0.4%
Revenue Next 2Y3.13%
Revenue Next 3Y3.95%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 26.42, the valuation of AIT can be described as expensive.
AIT's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.48. AIT is around the same levels.
A Price/Forward Earnings ratio of 24.55 indicates a rather expensive valuation of AIT.
Based on the Price/Forward Earnings ratio, AIT is valued a bit more expensive than the industry average as 60.42% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of AIT to the average of the S&P500 Index (34.04), we can say AIT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.42 | ||
| Fwd PE | 24.55 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AIT is valued a bit more expensive than 66.67% 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 70.83% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.84 | ||
| EV/EBITDA | 18.31 |
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)11.57
PEG (5Y)1.61
EPS Next 2Y4.43%
EPS Next 3Y6.29%
5. Dividend
5.1 Amount
With a yearly dividend of 0.70%, AIT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.05, AIT has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, AIT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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 2Y4.43%
EPS Next 3Y6.29%
263.13
-0.3 (-0.11%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners98.69%
Inst Owner Change0.08%
Ins Owners0.87%
Ins Owner Change-1.12%
Market Cap10.02B
Analysts83.08
Price Target285.96 (8.68%)
Short Float %1.76%
Short Ratio1.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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)0%
PT rev (3m)-3.47%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)-4.67%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.3%
Revenue NQ rev (1m)-0.5%
Revenue NQ rev (3m)-3.63%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-1.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.42 | ||
| Fwd PE | 24.55 | ||
| P/S | 2.23 | ||
| P/FCF | 22.84 | ||
| P/OCF | 21.57 | ||
| P/B | 5.48 | ||
| P/tB | 12.81 | ||
| EV/EBITDA | 18.31 |
EPS(TTM)9.96
EY3.79%
EPS(NY)10.72
Fwd EY4.07%
FCF(TTM)11.52
FCFY4.38%
OCF(TTM)12.2
OCFY4.64%
SpS118.16
BVpS47.99
TBVpS20.54
PEG (NY)11.57
PEG (5Y)1.61
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 | 8.18 |
F-Score6
WACC9.72%
ROIC/WACC1.51
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 Y2.28%
EPS Next 2Y4.43%
EPS Next 3Y6.29%
EPS Next 5Y5.62%
Revenue 1Y (TTM)0.5%
Revenue growth 3Y11.45%
Revenue growth 5Y5.22%
Sales Q2Q%1.78%
Revenue Next Year0.4%
Revenue Next 2Y3.13%
Revenue Next 3Y3.95%
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%