Applied Industrial Technologies (NYSE:AIT) versus Sumitomo Heavy (OTCMKTS:SOHVY) Head-To-Head Contrast

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

Analyst Ratings

This is a breakdown of current recommendations for Applied Industrial Technologies and Sumitomo Heavy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Industrial Technologies	0	1	7	0	2.88
Sumitomo Heavy	0	0	0	0	0.00

Applied Industrial Technologies presently has a consensus price target of $285.00, indicating a potential upside of 15.34%. Given Applied Industrial Technologies’ stronger consensus rating and higher probable upside, research analysts clearly believe Applied Industrial Technologies is more favorable than Sumitomo Heavy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Industrial Technologies	8.61%	21.78%	12.74%
Sumitomo Heavy	-0.29%	3.86%	1.97%

Valuation & Earnings

This table compares Applied Industrial Technologies and Sumitomo Heavy”s top-line 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	2.04	$392.99 million	$10.12	24.42
Sumitomo Heavy	$7.08 billion	0.40	$50.97 million	($0.03)	-198.20

Applied Industrial Technologies has higher earnings, but lower revenue than Sumitomo Heavy. Sumitomo Heavy 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 and Volatility

Applied Industrial Technologies has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Sumitomo Heavy has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Dividends

Applied Industrial Technologies pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Sumitomo Heavy pays an annual dividend of $0.14 per share and has a dividend yield of 2.4%. Applied Industrial Technologies pays out 18.2% of its earnings in the form of a dividend. Sumitomo Heavy pays out -466.7% 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. Sumitomo Heavy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

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

Summary

Applied Industrial Technologies beats Sumitomo Heavy on 14 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 Sumitomo Heavy

Sumitomo Heavy Industries, Ltd. manufactures and sells general machinery, advanced precision machinery, construction machinery, ships, and environmental plant facilities in Japan and internationally. Its Mechatronics segment offers gearmotors, gearboxes, motion control drives, motors and inverters, drive solutions, precision positioning equipment, laser systems, control systems, motion components, and collaborative robot. The company's Industrial Machinery segment provides injection molding machines, cryocoolers, ion implanters, PET tracer production systems, vacuum coasting equipment, steel tube air forming, non-destructive inspections, clean room system, cast iron and steel rolls for hot rolling, and coolant systems. Its Logistics & Construction segment offers hydraulic excavators, crawler cranes, material handing systems, parking systems, transfer molding presses, cryopumps, proton therapy systems, forging presses, lifting magnets, spinning machines, dust collectors, surface grinding machines, extrusion coating line, road machinery, foundation machines, logistics systems, and forklifts. The company's Energy & Lifelines segment provides circulating fluidized bed (CFB) boilers, liquid air energy storage, electrostatic precipitators, evaporation and crystallization facilities, waste heat boilers, CFB scrubbers, flue gas denitrification systems, industrial wastewater treatment facilities, steam turbines, distillation technology and extractors, mixing vessels, and food and beverage manufacturing facilities. This segment also offers bubbling fluidized bed boilers, rotary kiln-type recycling facilities, ash handling systems, fluidized bed gasifiers, waste-to-energy plants baghouses, digital services, water and sewage treatment systems, process pumps, reactor vessels, coke oven machines, and oils tankers. The company provides IT solutions and security services. Sumitomo Heavy Industries, Ltd. was founded in 1888 and is headquartered in Tokyo, Japan.