Contrasting DXP Enterprises (DXPE) and Applied Industrial Technologies (AIT)

Applied Industrial Technologies (NYSE: AIT) and DXP Enterprises (NASDAQ:DXPE) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Applied Industrial Technologies and DXP Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Industrial Technologies 0 2 0 0 2.00
DXP Enterprises 0 2 2 0 2.50

Applied Industrial Technologies presently has a consensus target price of $63.00, suggesting a potential upside of 15.81%. DXP Enterprises has a consensus target price of $41.00, suggesting a potential upside of 60.66%. Given DXP Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe DXP Enterprises is more favorable than Applied Industrial Technologies.

Profitability

This table compares Applied Industrial Technologies and DXP Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Industrial Technologies 5.16% 15.89% 8.39%
DXP Enterprises 1.58% 6.15% 2.41%

Insider and Institutional Ownership

87.6% of Applied Industrial Technologies shares are owned by institutional investors. Comparatively, 73.8% of DXP Enterprises shares are owned by institutional investors. 4.4% of Applied Industrial Technologies shares are owned by insiders. Comparatively, 11.3% of DXP Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Applied Industrial Technologies pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. DXP Enterprises does not pay a dividend. Applied Industrial Technologies pays out 34.1% of its earnings in the form of a dividend. Applied Industrial Technologies has raised its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Applied Industrial Technologies and DXP Enterprises’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Applied Industrial Technologies $2.59 billion 0.82 $214.27 million $3.40 16.00
DXP Enterprises $941.54 million 0.47 $59.70 million $0.84 30.38

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

Risk and Volatility

Applied Industrial Technologies has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 2.63, indicating that its share price is 163% more volatile than the S&P 500.

Summary

Applied Industrial Technologies beats DXP Enterprises on 10 of the 17 factors compared between the two stocks.

About Applied Industrial Technologies

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.

About DXP Enterprises

DXP Enterprises, Inc. (DXP) is engaged in the business of distributing maintenance, repair and operating (MRO) products, equipment and service to industrial customers. The Company operates through three segments: Service Centers, Supply Chain Services and Innovative Pumping Solutions. The Service Centers segment provides MRO products, equipment and services, including technical expertise and logistics capabilities to industrial customers. The Supply Chain Services segment manages all or part of a customer’s supply chain, including procurement and inventory management. The Innovative Pumping Solutions segment provides source for engineering, systems design and fabrication. It operates from approximately 190 locations in over 40 states in the United States, approximately 10 provinces in Canada, Dubai and one state in Mexico. The Company’s product categories include rotating equipment, bearings & power transmission, industrial supplies, metal working and safety products & services.

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