ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
254.54 USD
-0.58 (-0.23%)
254.54 USD
0 (0%)
ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. ITW scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, ITW is valued expensive at the moment. Finally ITW also has an excellent dividend rating. These ratings would make ITW suitable for dividend investing!
1. Profitability
1.1 Basic Checks
ITW had positive earnings in the past year.
In the past year ITW had a positive cash flow from operations.
In the past 5 years ITW has always been profitable.
Each year in the past 5 years ITW had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ITW (18.75%) is better than 96.97% of its industry peers.
ITW has a Return On Equity of 94.33%. This is amongst the best in the industry. ITW outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.44%, ITW belongs to the top of the industry, outperforming 97.73% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ITW is significantly above the industry average of 10.25%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROIC | 24.44% |
ROA(3y)20.63%
ROA(5y)18.43%
ROE(3y)100.54%
ROE(5y)88.45%
ROIC(3y)27.14%
ROIC(5y)23.98%
1.3 Margins
Looking at the Profit Margin, with a value of 19.05%, ITW belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
In the last couple of years the Profit Margin of ITW has grown nicely.
With an excellent Operating Margin value of 26.20%, ITW belongs to the best of the industry, outperforming 98.48% of the companies in the same industry.
In the last couple of years the Operating Margin of ITW has grown nicely.
ITW has a Gross Margin of 43.93%. This is amongst the best in the industry. ITW outperforms 83.33% of its industry peers.
ITW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.2% | ||
| PM (TTM) | 19.05% | ||
| GM | 43.93% |
OM growth 3Y3.7%
OM growth 5Y2.15%
PM growth 3Y5.59%
PM growth 5Y4.19%
GM growth 3Y2.37%
GM growth 5Y1.08%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ITW is creating value.
The number of shares outstanding for ITW has been reduced compared to 1 year ago.
The number of shares outstanding for ITW has been reduced compared to 5 years ago.
The debt/assets ratio for ITW has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.02 indicates that ITW is not in any danger for bankruptcy at the moment.
The Altman-Z score of ITW (8.02) is better than 90.15% of its industry peers.
The Debt to FCF ratio of ITW is 3.14, which is a good value as it means it would take ITW, 3.14 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ITW (3.14) is better than 67.42% of its industry peers.
A Debt/Equity ratio of 2.80 is on the high side and indicates that ITW has dependencies on debt financing.
The Debt to Equity ratio of ITW (2.80) is worse than 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.02 |
ROIC/WACC2.66
WACC9.19%
2.3 Liquidity
A Current Ratio of 1.53 indicates that ITW should not have too much problems paying its short term obligations.
With a Current ratio value of 1.53, ITW is not doing good in the industry: 70.45% of the companies in the same industry are doing better.
ITW has a Quick Ratio of 1.11. This is a normal value and indicates that ITW is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.11, ITW perfoms like the industry average, outperforming 43.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
ITW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.59%.
ITW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.34% yearly.
ITW shows a decrease in Revenue. In the last year, the revenue decreased by -0.41%.
ITW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.42% yearly.
EPS 1Y (TTM)2.59%
EPS 3Y7.79%
EPS 5Y5.34%
EPS Q2Q%6.04%
Revenue 1Y (TTM)-0.41%
Revenue growth 3Y3.22%
Revenue growth 5Y2.42%
Sales Q2Q%2.34%
3.2 Future
Based on estimates for the next years, ITW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.58% on average per year.
ITW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.85% yearly.
EPS Next Y3.82%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
EPS Next 5Y9.58%
Revenue Next Year0.35%
Revenue Next 2Y1.85%
Revenue Next 3Y2.34%
Revenue Next 5Y3.85%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ITW is valuated rather expensively with a Price/Earnings ratio of 24.69.
ITW's Price/Earnings ratio is in line with the industry average.
ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
ITW is valuated rather expensively with a Price/Forward Earnings ratio of 22.39.
The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
When comparing the Price/Forward Earnings ratio of ITW to the average of the S&P500 Index (23.98), we can say ITW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 22.39 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ITW.
ITW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.96 | ||
| EV/EBITDA | 17.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ITW may justify a higher PE ratio.
PEG (NY)6.47
PEG (5Y)4.62
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.54%, ITW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.80, ITW pays a better dividend. On top of this ITW pays more dividend than 90.91% of the companies listed in the same industry.
ITW's Dividend Yield is a higher than the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
5.2 History
The dividend of ITW is nicely growing with an annual growth rate of 6.98%!
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.
Dividend Growth(5Y)6.98%
Div Incr Years29
Div Non Decr Years29
5.3 Sustainability
ITW pays out 58.20% of its income as dividend. This is a bit on the high side, but may be sustainable.
ITW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP58.2%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
254.54
-0.58 (-0.23%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.97%
Inst Owner Change0.09%
Ins Owners0.24%
Ins Owner Change-8.46%
Market Cap73.84B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.55 (2.75%)
Short Float %2.62%
Short Ratio6.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP58.2%
Div Incr Years29
Div Non Decr Years29
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.08%
Min EPS beat(2)-0.33%
Max EPS beat(2)2.48%
EPS beat(4)3
Avg EPS beat(4)0.83%
Min EPS beat(4)-0.33%
Max EPS beat(4)2.48%
EPS beat(8)6
Avg EPS beat(8)1.3%
EPS beat(12)10
Avg EPS beat(12)2.72%
EPS beat(16)14
Avg EPS beat(16)2.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-1.32%
Min Revenue beat(4)-2.36%
Max Revenue beat(4)-0.27%
Revenue beat(8)0
Avg Revenue beat(8)-1.71%
Revenue beat(12)1
Avg Revenue beat(12)-1.46%
Revenue beat(16)5
Avg Revenue beat(16)-0.55%
PT rev (1m)-0.72%
PT rev (3m)0.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.99%
EPS NY rev (1m)0%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.7%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 22.39 | ||
| P/S | 4.65 | ||
| P/FCF | 25.96 | ||
| P/OCF | 22.53 | ||
| P/B | 23.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.71 |
EPS(TTM)10.31
EY4.05%
EPS(NY)11.37
Fwd EY4.47%
FCF(TTM)9.81
FCFY3.85%
OCF(TTM)11.3
OCFY4.44%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.47
PEG (5Y)4.62
Graham Number50.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROCE | 34.67% | ||
| ROIC | 24.44% | ||
| ROICexc | 26.26% | ||
| ROICexgc | 47.73% | ||
| OM | 26.2% | ||
| PM (TTM) | 19.05% | ||
| GM | 43.93% | ||
| FCFM | 17.91% |
ROA(3y)20.63%
ROA(5y)18.43%
ROE(3y)100.54%
ROE(5y)88.45%
ROIC(3y)27.14%
ROIC(5y)23.98%
ROICexc(3y)29.48%
ROICexc(5y)26.81%
ROICexgc(3y)61.41%
ROICexgc(5y)56.02%
ROCE(3y)37.16%
ROCE(5y)32.24%
ROICexgc growth 3Y8.37%
ROICexgc growth 5Y6.32%
ROICexc growth 3Y9.35%
ROICexc growth 5Y5.29%
OM growth 3Y3.7%
OM growth 5Y2.15%
PM growth 3Y5.59%
PM growth 5Y4.19%
GM growth 3Y2.37%
GM growth 5Y1.08%
F-Score6
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Debt/EBITDA | 1.97 | ||
| Cap/Depr | 109.09% | ||
| Cap/Sales | 2.72% | ||
| Interest Coverage | 15.13 | ||
| Cash Conversion | 71.9% | ||
| Profit Quality | 94.02% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 8.02 |
F-Score6
WACC9.19%
ROIC/WACC2.66
Cap/Depr(3y)108.13%
Cap/Depr(5y)90.37%
Cap/Sales(3y)2.72%
Cap/Sales(5y)2.42%
Profit Quality(3y)83.21%
Profit Quality(5y)91.1%
High Growth Momentum
Growth
EPS 1Y (TTM)2.59%
EPS 3Y7.79%
EPS 5Y5.34%
EPS Q2Q%6.04%
EPS Next Y3.82%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
EPS Next 5Y9.58%
Revenue 1Y (TTM)-0.41%
Revenue growth 3Y3.22%
Revenue growth 5Y2.42%
Sales Q2Q%2.34%
Revenue Next Year0.35%
Revenue Next 2Y1.85%
Revenue Next 3Y2.34%
Revenue Next 5Y3.85%
EBIT growth 1Y-1.4%
EBIT growth 3Y7.04%
EBIT growth 5Y4.62%
EBIT Next Year8.67%
EBIT Next 3Y6.4%
EBIT Next 5Y6.59%
FCF growth 1Y0.49%
FCF growth 3Y7.95%
FCF growth 5Y1.28%
OCF growth 1Y-1.03%
OCF growth 3Y8.67%
OCF growth 5Y1.84%
ILLINOIS TOOL WORKS / ITW FAQ
What is the ChartMill fundamental rating of ILLINOIS TOOL WORKS (ITW) stock?
ChartMill assigns a fundamental rating of 6 / 10 to ITW.
Can you provide the valuation status for ILLINOIS TOOL WORKS?
ChartMill assigns a valuation rating of 3 / 10 to ILLINOIS TOOL WORKS (ITW). This can be considered as Overvalued.
How profitable is ILLINOIS TOOL WORKS (ITW) stock?
ILLINOIS TOOL WORKS (ITW) has a profitability rating of 9 / 10.
What is the valuation of ILLINOIS TOOL WORKS based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ILLINOIS TOOL WORKS (ITW) is 24.69 and the Price/Book (PB) ratio is 23.02.
Is the dividend of ILLINOIS TOOL WORKS sustainable?
The dividend rating of ILLINOIS TOOL WORKS (ITW) is 8 / 10 and the dividend payout ratio is 58.2%.