Head-To-Head Comparison: Applied Industrial Technologies (AIT) and Lawson Products (LAWS)

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

Dividends

Applied Industrial Technologies pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. Lawson Products 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 increased its dividend for 7 consecutive years.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lawson Products 0 0 1 0 3.00
Applied Industrial Technologies 0 2 0 0 2.00

Lawson Products presently has a consensus target price of $25.00, indicating a potential upside of 7.53%. Applied Industrial Technologies has a consensus target price of $63.00, indicating a potential upside of 15.81%. Given Applied Industrial Technologies’ higher possible upside, analysts clearly believe Applied Industrial Technologies is more favorable than Lawson Products.

Risk & Volatility

Lawson Products has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Applied Industrial Technologies has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Insider & Institutional Ownership

65.3% of Lawson Products shares are held by institutional investors. Comparatively, 87.6% of Applied Industrial Technologies shares are held by institutional investors. 18.2% of Lawson Products shares are held by insiders. Comparatively, 4.4% of Applied Industrial Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Lawson Products 1.85% 2.54% 1.22%
Applied Industrial Technologies 5.16% 15.89% 8.39%

Earnings & Valuation

This table compares Lawson Products and Applied Industrial Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lawson Products $287.14 million 0.72 $6.80 million $0.56 41.52
Applied Industrial Technologies $2.59 billion 0.82 $214.27 million $3.40 16.00

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

Summary

Applied Industrial Technologies beats Lawson Products on 11 of the 17 factors compared between the two stocks.

About Lawson Products

Lawson Products, Inc. is a distributor of products and services the industrial, commercial, institutional and government maintenance, repair and operations (MRO) market. The Company’s product categories include fastening systems, fluid power, specialty chemicals, cutting tools and abrasives, electrical, aftermarket automotive supplies, safety, welding and metal repair, and other. The Company supplies a range of automotive products, including body hardware, body shop, brake/wheel, fleet/truck, repair harness assembly and other parts. The Company offers approximately 200,000 different core products for sale of which approximately 50,000 products are maintained in its distribution centers. The Company’s customers operate in a range of industries, including automotive repair, commercial vehicle maintenance, government, manufacturing, food processing, distribution, construction, oil and gas, mining, wholesale and service.

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.

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