Global Industrial (NYSE:GIC) vs. Applied Industrial Technologies (NYSE:AIT) Critical Review

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

Institutional & Insider Ownership

31.2% of Global Industrial shares are owned by institutional investors. Comparatively, 93.5% of Applied Industrial Technologies shares are owned by institutional investors. 64.5% of Global Industrial shares are owned by insiders. Comparatively, 1.6% of Applied Industrial Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Global Industrial and Applied Industrial Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Industrial	0	3	0	0	2.00
Applied Industrial Technologies	0	0	6	1	3.14

Global Industrial presently has a consensus target price of $39.00, suggesting a potential downside of 11.01%. Applied Industrial Technologies has a consensus target price of $398.33, suggesting a potential upside of 19.27%. Given Applied Industrial Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Applied Industrial Technologies is more favorable than Global Industrial.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Industrial	$1.38 billion	1.21	$72.10 million	$2.24	19.56
Applied Industrial Technologies	$4.97 billion	2.47	$414.52 million	$10.96	30.47

Applied Industrial Technologies has higher revenue and earnings than Global Industrial. Global Industrial 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.

Volatility & Risk

Global Industrial has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Applied Industrial Technologies has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Dividends

Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Applied Industrial Technologies pays an annual dividend of $2.04 per share and has a dividend yield of 0.6%. Global Industrial pays out 50.0% of its earnings in the form of a dividend. Applied Industrial Technologies pays out 18.6% 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. Global Industrial has raised its dividend for 9 consecutive years and Applied Industrial Technologies has raised its dividend for 16 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Global Industrial	6.06%	21.49%	11.60%
Applied Industrial Technologies	8.35%	22.17%	13.43%

Summary

Applied Industrial Technologies beats Global Industrial on 16 of the 18 factors compared between the two stocks.

About Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.

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.