ExploringILLINOIS TOOL WORKS (NYSE:ITW)'s dividend characteristics.

ILLINOIS TOOL WORKS (NYSE:ITW) has caught the attention of dividend investors as a stock worth considering. NYSE:ITW excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

Looking at the Dividend

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NYSE:ITW has been assigned a 7 for dividend:

• Compared to an average industry Dividend Yield of 1.67, ITW pays a better dividend. On top of this ITW pays more dividend than 89.60% of the companies listed in the same industry.
• On average, the dividend of ITW grows each year by 6.98%, which is quite nice.
• ITW has paid a dividend for at least 10 years, which is a reliable track record.
• ITW has not decreased their dividend for at least 10 years, which is a reliable track record.

Looking at the Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ITW has received a 5 out of 10:

• An Altman-Z score of 8.73 indicates that ITW is not in any danger for bankruptcy at the moment.
• ITW has a better Altman-Z score (8.73) than 92.80% of its industry peers.
• The Debt to FCF ratio of ITW is 2.76, which is a good value as it means it would take ITW, 2.76 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 2.76, ITW is doing good in the industry, outperforming 68.80% of the companies in the same industry.

Assessing Profitability for NYSE:ITW

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:ITW has earned a 9 out of 10:

• With an excellent Return On Assets value of 23.15%, ITW belongs to the best of the industry, outperforming 99.20% of the companies in the same industry.
• The Return On Equity of ITW (105.19%) is better than 100.00% of its industry peers.
• ITW's Return On Invested Capital of 28.87% is amongst the best of the industry. ITW outperforms 97.60% of its industry peers.
• ITW had an Average Return On Invested Capital over the past 3 years of 27.14%. This is significantly above the industry average of 10.89%.
• The last Return On Invested Capital (28.87%) for ITW is above the 3 year average (27.14%), which is a sign of increasing profitability.
• ITW has a better Profit Margin (21.94%) than 96.80% of its industry peers.
• In the last couple of years the Profit Margin of ITW has grown nicely.
• The Operating Margin of ITW (26.82%) is better than 98.40% of its industry peers.
• ITW's Operating Margin has improved in the last couple of years.
• ITW has a Gross Margin of 44.28%. This is amongst the best in the industry. ITW outperforms 82.40% of its industry peers.

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For an up to date full fundamental analysis you can check the fundamental report of ITW

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.