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Here's Why It is Worth Investing in Applied Industrial Stock

Core Viewpoint - Applied Industrial Technologies, Inc. (AIT) is experiencing growth driven by its Engineered Solutions segment and strategic acquisitions, alongside shareholder-friendly initiatives that enhance value [1][4]. Group 1: Company Overview - Applied Industrial is a distributor of value-added industrial products, including engineered fluid power components, bearings, and power transmission products, primarily serving OEMs and maintenance customers in regions like Australia, North America, Singapore, and New Zealand [2]. - The company's stock has increased by 26% over the past year, significantly outperforming the industry, which saw a decline of 0.1% [2]. Group 2: Growth Drivers - AIT is well-positioned for growth due to strong performance in key markets such as chemicals, food and beverage, pulp and paper, and technology, with particular demand in the semiconductor sector and technology-related fluid power markets [5]. - Favorable order trends in automation and technology verticals are further supporting revenue growth in the Engineered Solutions segment [5]. Group 3: Expansion Initiatives - AIT has enhanced its product portfolio through strategic acquisitions, including Hydradyne in January 2025, which strengthens its fluid power offerings and expands its presence in the Southeast U.S. [6]. - The acquisition of Grupo Kopar in May 2024 extended AIT's automation platform into Mexico, while the acquisitions of Bearing Distributors and Cangro in September 2023 bolstered its strategic growth in the U.S. Southeast and upper Northeast regions [6]. - The buyout of Advanced Motion Systems Inc. in April 2023 further expanded AIT's footprint in the upper Northeast and strengthened supplier relationships [6]. Group 4: Shareholder Returns - AIT is committed to increasing shareholder value through dividends and share repurchases, having paid out $28.4 million in dividends in the first half of fiscal 2025, a 4.4% increase year-over-year [7]. - The company raised its quarterly dividend rate by 24% in January 2025 and has a share buyback program authorized for up to 1.5 million shares, with 974,624 shares remaining to be repurchased as of December 31, 2024 [7].