Here's Why You Should Consider Investing in Applied Industrial Stock

Applied Industrial Technologies, Inc. AIT is well-poised to benefit from strength across its business, acquisitions, focus on improving the product line and operational excellence. The company remains focused on investing in growth opportunities and solidifying its long-term market position.

AIT has a market capitalization of $10.2 billion and currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.

Business Strength: Applied Industrial continues to benefit from demand for technical MRO services, which remains a key support for the Service Center Based Distribution segment. In second-quarter fiscal 2026, the Service Center segment’s organic sales rose 2.9% year over year, with U.S. organic sales up more than 4% as internal initiatives and local account execution improved.

Acquisition Benefits: The company continues to add assets that expand capabilities and geographic reach. In the fiscal second quarter, acquisitions had a positive impact of 6% on the company's sales. The company announced the bolt-on acquisition of Thompson Industrial Supply (in January 2026), which is expected to generate approximately $20 million of annual sales in its first year and will be integrated into Service Center operations.

In May 2025, the company acquired IRIS Factory Automation (“IRIS”). The acquisition boosted Applied Industrial’s automation offerings and was integrated into the Engineered Solutions segment.

Price Performance of AIT

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In the past year, AIT has gained 24.4% compared with the industry’s 22.5% growth.

Business Initiatives: AIT’s focus on improving the product line, increasing value-added services and initiatives to drive operational excellence will boost results in the quarters ahead. Its focus on pricing, mix, channel execution and internal initiatives remains supportive of underlying margins, even as near-term inflation affects reported results.

Shareholder-Friendly Policies: It remains committed to rewarding its shareholders through dividend payouts and share buybacks. In the first six months of fiscal 2026, it paid out dividends worth $34.7 million, up 21.8% on a year-over-year basis. Also, the company increased its quarterly dividend by 11% to 51 cents per share and repurchased shares worth $143.4 million during the first half of fiscal 2026.

Other Stocks to Consider

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Flowserve Corporation FLS presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Flowserve’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 17.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2026 earnings has increased 4.6%.

Nordson Corporation NDSN currently carries a Zacks Rank of 2. Nordson’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 2.5%.

In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2026 earnings has increased 2%.

Parker-Hannifin Corporation PH currently carries a Zacks Rank of 2. Parker-Hannifin’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 6.8%.

In the past 60 days, the Zacks Consensus Estimate for Parker-Hannifin’s fiscal 2026 earnings has increased 0.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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