Head to Head Analysis: Applied Industrial Technologies (NYSE:AIT) & Otis Worldwide (NYSE:OTIS)

Applied Industrial Technologies (NYSE:AIT) and Otis Worldwide (NYSE:OTIS) are both large-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Applied Industrial Technologies and Otis Worldwide, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Industrial Technologies	0	1	5	0	2.83
Otis Worldwide	1	7	3	0	2.18

Applied Industrial Technologies presently has a consensus target price of $295.00, suggesting a potential downside of 2.34%. Otis Worldwide has a consensus target price of $97.64, suggesting a potential upside of 26.05%. Given Otis Worldwide’s higher possible upside, analysts plainly believe Otis Worldwide is more favorable than Applied Industrial Technologies.

Insider and Institutional Ownership

93.5% of Applied Industrial Technologies shares are owned by institutional investors. Comparatively, 88.0% of Otis Worldwide shares are owned by institutional investors. 1.6% of Applied Industrial Technologies shares are owned by insiders. Comparatively, 0.2% of Otis Worldwide shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Applied Industrial Technologies has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.

Dividends

Applied Industrial Technologies pays an annual dividend of $2.04 per share and has a dividend yield of 0.7%. Otis Worldwide pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Applied Industrial Technologies pays out 19.4% of its earnings in the form of a dividend. Otis Worldwide pays out 44.7% 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 and Otis Worldwide has increased its dividend for 5 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Industrial Technologies	8.49%	21.74%	12.78%
Otis Worldwide	10.11%	-29.39%	14.86%

Valuation & Earnings

This table compares Applied Industrial Technologies and Otis Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Industrial Technologies	$4.56 billion	2.47	$392.99 million	$10.51	28.74
Otis Worldwide	$14.43 billion	2.06	$1.38 billion	$3.76	20.60

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

Summary

Applied Industrial Technologies beats Otis Worldwide on 10 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 Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.