Reviewing Applied Industrial Technologies (NYSE:AIT) & Ingersoll Rand (NYSE:IR)

Applied Industrial Technologies (NYSE:AIT) and Ingersoll Rand (NYSE:IR) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Dividends

Applied Industrial Technologies pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Ingersoll Rand pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Applied Industrial Technologies pays out 17.7% of its earnings in the form of a dividend. Ingersoll Rand pays out 5.9% 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 increased its dividend for 16 consecutive years. Applied Industrial Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Applied Industrial Technologies and Ingersoll Rand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Industrial Technologies	8.61%	21.86%	12.83%
Ingersoll Rand	7.31%	12.14%	6.88%

Analyst Ratings

This is a breakdown of recent recommendations for Applied Industrial Technologies and Ingersoll Rand, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Industrial Technologies	0	1	6	0	2.86
Ingersoll Rand	1	6	4	0	2.27

Applied Industrial Technologies presently has a consensus target price of $287.50, suggesting a potential upside of 9.68%. Ingersoll Rand has a consensus target price of $91.22, suggesting a potential upside of 11.60%. Given Ingersoll Rand’s higher probable upside, analysts plainly believe Ingersoll Rand is more favorable than Applied Industrial Technologies.

Volatility and Risk

Applied Industrial Technologies has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Ingersoll Rand has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Institutional & Insider Ownership

93.5% of Applied Industrial Technologies shares are held by institutional investors. Comparatively, 95.3% of Ingersoll Rand shares are held by institutional investors. 1.6% of Applied Industrial Technologies shares are held by company insiders. Comparatively, 0.6% of Ingersoll Rand shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Applied Industrial Technologies and Ingersoll Rand”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Industrial Technologies	$4.56 billion	2.17	$392.99 million	$10.39	25.23
Ingersoll Rand	$7.24 billion	4.46	$838.60 million	$1.35	60.55

Ingersoll Rand has higher revenue and earnings than Applied Industrial Technologies. Applied Industrial Technologies is trading at a lower price-to-earnings ratio than Ingersoll Rand, indicating that it is currently the more affordable of the two stocks.

Summary

Applied Industrial Technologies beats Ingersoll Rand on 9 of the 17 factors compared between the two stocks.

About Applied Industrial Technologies

Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates in two segments, Service Center Based Distribution, and Engineered Solutions. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides technical support services; engages in the distribution of fluid power and industrial flow control products; advanced automation solutions, including machine vision, robotics, motion control, and smart technologies. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.

About Ingersoll Rand

Ingersoll Rand Inc. provides various mission-critical air, gas, liquid, and solid flow creation technologies services and solutions worldwide. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services segment designs, manufactures, markets, and services air and gas compression, vacuum, and blower products; fluid transfer equipment and loading systems; and power tools and lifting equipment, including associated aftermarket parts, consumables, air treatment equipment, controls, other accessories, and services under the under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle brands, etc. The Precision and Science Technologies segment designs, manufactures, and markets diaphragm, piston, water-powered, peristaltic, gear, vane, progressive cavity, and syringe pumps; and gas boosters, hydrogen compression systems, automated liquid handling systems, odorant injection systems, controls, software, and other related components and accessories for liquid and gas dosing, transfer, dispensing, compression, sampling, pressure management, and flow control in specialized or critical applications under the Air Dimensions, Albin, ARO, Dosatron, Haskel, Ingersoll Rand, LMI, Maximus, Milton Roy, MP, Oberdorfer, Seepex, Thomas, Welch, Williams, YZ, and Zinnser Analytic brand names. This segment's products are used in medical, life sciences, industrial manufacturing, water and wastewater, chemical processing, energy, food and beverage, agriculture, and other markets. It sells through an integrated network of direct sales representatives and independent distributors. The company was formerly known as Gardner Denver Holdings, Inc. and changed its name to Ingersoll Rand Inc. in March 2020. Ingersoll Rand Inc. was founded in 1859 and is headquartered in Davidson, North Carolina.