Fastenal Company (FAST) vs. Applied Industrial Technologies (AIT) Critical Comparison
Applied Industrial Technologies (NYSE: AIT) and Fastenal Company (NASDAQ:FAST) are both mid-cap industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, valuation, earnings, risk and analyst recommendations.
This is a breakdown of current recommendations for Applied Industrial Technologies and Fastenal Company, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Applied Industrial Technologies||0||1||0||0||2.00|
Applied Industrial Technologies currently has a consensus price target of $63.00, suggesting a potential upside of 8.53%. Fastenal Company has a consensus price target of $50.57, suggesting a potential upside of 17.94%. Given Fastenal Company’s stronger consensus rating and higher probable upside, analysts plainly believe Fastenal Company is more favorable than Applied Industrial Technologies.
Valuation and Earnings
This table compares Applied Industrial Technologies and Fastenal Company’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Applied Industrial Technologies||$2.55 billion||0.89||$208.18 million||$2.72||21.34|
|Fastenal Company||$4.13 billion||2.99||$952.46 million||$1.82||23.56|
Fastenal Company has higher revenue and earnings than Applied Industrial Technologies. Applied Industrial Technologies is trading at a lower price-to-earnings ratio than Fastenal Company, indicating that it is currently the more affordable of the two stocks.
This table compares Applied Industrial Technologies and Fastenal Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Applied Industrial Technologies||4.20%||15.70%||8.15%|
Volatility and Risk
Applied Industrial Technologies has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Fastenal Company has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.
Institutional & Insider Ownership
88.0% of Applied Industrial Technologies shares are held by institutional investors. Comparatively, 82.3% of Fastenal Company shares are held by institutional investors. 4.4% of Applied Industrial Technologies shares are held by insiders. Comparatively, 0.6% of Fastenal Company shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Applied Industrial Technologies pays an annual dividend of $1.16 per share and has a dividend yield of 2.0%. Fastenal Company pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Applied Industrial Technologies pays out 42.6% of its earnings in the form of a dividend. Fastenal Company pays out 70.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Applied Industrial Technologies has raised its dividend for 7 consecutive years and Fastenal Company has raised its dividend for 6 consecutive years.
Fastenal Company beats Applied Industrial Technologies on 13 of the 18 factors compared between the two stocks.
Applied Industrial Technologies Company Profile
Applied Industrial Technologies, Inc. is an industrial distributor in North America, Australia and New Zealand, serving maintenance, repair and operations (MRO), and original equipment manufacturing customers in various industries. In addition, the Company provides engineering, design, and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber, and fluid power shop services. It operates in two segments: service center-based distribution and fluid power businesses. The service center-based distribution segment provides customers with a range of industrial products primarily through a network of service centers. The fluid power businesses segment consists of specialized regional companies that distribute fluid power components, design and assemble fluid power systems, and perform equipment repair. The fluid power businesses primarily sell products and services directly to customers rather than through the service centers.
Fastenal Company Company Profile
Fastenal Company is engaged in wholesale distribution of industrial and construction supplies. The Company is engaged in fastener distribution, and non-fastener maintenance and supply business. As of December 31, 2016, it distributed these supplies through a network of approximately 2,500 stores. Its customers are in the manufacturing and non-residential construction markets. The manufacturing market includes both original equipment manufacturers (OEM) and maintenance, repair, and operations (MRO). The non-residential construction market includes general, electrical, plumbing, sheet metal and road contractors. Other users of its products include farmers, truckers, railroads, oil exploration, production and refinement companies, mining companies, federal, state, and local governmental entities, schools and certain retail trades. Its original product offerings are fasteners and other industrial and construction supplies, many of which are sold under the Fastenal product name.
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