Applied Industrial Technologies (NYSE:AIT) and Alta Equipment Group (NYSE:ALTG) Critical Comparison

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

Dividends

Applied Industrial Technologies pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Alta Equipment Group pays an annual dividend of $0.23 per share and has a dividend yield of 3.1%. Applied Industrial Technologies pays out 18.5% of its earnings in the form of a dividend. Alta Equipment Group pays out -10.3% 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 increased its dividend for 16 consecutive years. Alta Equipment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Applied Industrial Technologies and Alta Equipment Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Industrial Technologies	0	0	7	0	3.00
Alta Equipment Group	0	1	2	2	3.20

Applied Industrial Technologies presently has a consensus price target of $285.00, indicating a potential upside of 9.62%. Alta Equipment Group has a consensus price target of $11.25, indicating a potential upside of 52.34%. Given Alta Equipment Group’s stronger consensus rating and higher possible upside, analysts clearly believe Alta Equipment Group is more favorable than Applied Industrial Technologies.

Profitability

This table compares Applied Industrial Technologies and Alta Equipment Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Industrial Technologies	8.64%	22.01%	12.83%
Alta Equipment Group	-3.83%	-80.23%	-4.64%

Earnings & Valuation

This table compares Applied Industrial Technologies and Alta Equipment Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Industrial Technologies	$4.48 billion	2.21	$385.76 million	$9.96	26.10
Alta Equipment Group	$1.88 billion	0.13	-$62.10 million	($2.23)	-3.31

Applied Industrial Technologies has higher revenue and earnings than Alta Equipment Group. Alta Equipment Group 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.

Risk & Volatility

Applied Industrial Technologies has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Alta Equipment Group has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Institutional & Insider Ownership

93.5% of Applied Industrial Technologies shares are held by institutional investors. Comparatively, 73.6% of Alta Equipment Group shares are held by institutional investors. 1.7% of Applied Industrial Technologies shares are held by insiders. Comparatively, 19.9% of Alta Equipment Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Applied Industrial Technologies beats Alta Equipment Group on 11 of the 18 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 Alta Equipment Group

Alta Equipment Group Inc. owns and operates integrated equipment dealership platforms in the United States. It operates through three segments: Material Handling, Construction Equipment, and Master Distribution. The company operates a branch network that sells, rents, and provides parts and service support for various categories of specialized equipment, including lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, paving and asphalt equipment, and other construction equipment and related products. It also offers repair and maintenance services for its equipment. In addition, the company designs and builds warehouses; provides automated equipment installation and system integration solutions; and distributes environmental processing equipment. It serves various manufacturing, food and beverage, automotive, municipal/government, education, pharmaceutical and medical, wholesale and retail distribution, construction, agriculture, road building, mining, recycling, and waste management sectors. Alta Equipment Group Inc. was founded in 1984 and is headquartered in Livonia, Michigan.