Applied Industrial Technologies, Inc. AIT is benefiting from strength in its Engineered Solutions segment and accretive acquisitions. The company’s shareholder-friendly moves also augur well.

Applied Industrial is a distributor of value-added industrial products, including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies. These products are mainly sold to original equipment manufacturers (OEMs) and maintenance, repair and operations customers in Australia, North America, Singapore and New Zealand. In the past year, the stock has gained 26% against the industry’s 0.1% decline.

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Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.

Brisk Segment: Applied Industrial is well-positioned for growth, driven by strong performance in its key markets, including chemicals, food and beverage, pulp and paper, and technology. The Engineered Solutions segment is benefiting from increased demand in the semiconductor sector and robust performance in technology-related fluid power end markets. Favorable order trends in automation and technology verticals are further supporting revenue growth in this segment.

Expansion Initiatives: AIT solidified its product portfolio and leveraged business opportunities through asset additions. Applied Industrial’s acquisition of Hydradyne (in January 2025) will bolster its fluid power offerings. It will enable the company to create cross-selling opportunities and expand its footprint in the Southeast U.S. region. Also, in May 2024, it acquired Grupo Kopar, which expanded its automation platform and extended its footprint into Mexico. The acquisitions of Bearing Distributors and Cangro (September 2023) enhanced the company’s footprint and strategic growth initiatives across the U.S. Southeast and upper Northeast regions. The Advanced Motion Systems Inc. (April 2023) buyout expanded AIT’s footprint in the upper Northeast region of the United States while helping to bolster relationships with leading suppliers.

Rewards to Shareholders: Applied Industrial continues to increase shareholders’ value through dividend payment and share repurchases. In the first six months of fiscal 2025, it paid out dividends worth $28.4 million, up 4.4% on a year-over-year basis. The company hiked its quarterly dividend rate by 24% in January 2025. In August 2022, its board of directors authorized a new share buyback program to repurchase up to 1.5 million shares of its common stock. As of Dec. 31, 2024, it was left with repurchasing 974,624 shares.

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Other top-ranked companies are discussed below.

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In the past 60 days, the consensus estimate for MIDD’s 2025 earnings has inched up 0.8%.

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