Critical Review: Luxfer (NYSE:LXFR) vs. Applied Industrial Technologies (NYSE:AIT)

Applied Industrial Technologies (NYSE:AIT) and Luxfer (NYSE:LXFR) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Dividends

Applied Industrial Technologies pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Luxfer pays an annual dividend of $0.52 per share and has a dividend yield of 3.7%. Applied Industrial Technologies pays out 17.7% of its earnings in the form of a dividend. Luxfer pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Applied Industrial Technologies has raised its dividend for 16 consecutive years.

Insider & Institutional Ownership

93.5% of Applied Industrial Technologies shares are held by institutional investors. Comparatively, 90.8% of Luxfer shares are held by institutional investors. 1.6% of Applied Industrial Technologies shares are held by insiders. Comparatively, 1.2% of Luxfer shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Applied Industrial Technologies and Luxfer”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Industrial Technologies	$4.56 billion	2.18	$392.99 million	$10.39	25.43
Luxfer	$391.90 million	0.95	$18.40 million	$0.53	26.42

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

Volatility & Risk

Applied Industrial Technologies has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Luxfer has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Industrial Technologies	8.61%	21.86%	12.83%
Luxfer	3.60%	11.58%	6.86%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Applied Industrial Technologies and Luxfer, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Industrial Technologies	0	1	6	0	2.86
Luxfer	0	1	0	0	2.00

Applied Industrial Technologies presently has a consensus price target of $287.50, suggesting a potential upside of 8.83%. Given Applied Industrial Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Applied Industrial Technologies is more favorable than Luxfer.

Summary

Applied Industrial Technologies beats Luxfer 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 Luxfer

Luxfer Holdings PLC, together with its subsidiaries, designs, manufactures, and supplies high-performance materials, components, and high-pressure gas containment devices for defense and first response, healthcare, transportation, and general industrial applications. The company operates through three segments: Elektron, Gas Cylinders, and graphic Arts. The Elektron segment focuses on specialty materials based primarily on magnesium and zirconium. This segment also provides magnesium alloys for use in aerospace, healthcare, and oil and gas applications; magnesium powders for use in countermeasure flares, as well as heater meals; and zirconium-based materials and oxides used as catalysts and in the manufacture of advanced ceramics, fiber-optic fuel cells, pharmaceuticals, and other performance products. The Gas Cylinders segment manufactures and markets specialized products using carbon composites and aluminum alloys, including pressurized cylinders for use in various applications comprising self-contained breathing apparatus (SCBA) for firefighters, containment of oxygen, and other medical gases for healthcare, alternative fuel vehicles, and general industrial applications. The Graphic Art segments provides magnesium photo-engraving plates, engraving metals, and etching chemicals. This segment also offers magnesium, copper, and zinc photo-engraving plates for graphic arts and luxury packaging; developer solutions; and solid wrought magnesium slab and sheet. Luxfer Holdings PLC has operations in the United States, the United Kingdom, Japan, Germany, Canada, rest of Europe, the Asia Pacific, and internationally. The company was founded in 1898 and is headquartered in Milwaukee, Wisconsin.