ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
263.47 USD
+1.58 (+0.6%)
263.48 USD
0.01 (0%)
Overall ITW gets a fundamental rating of 6 out of 10. We evaluated ITW against 132 industry peers in the Machinery industry. While ITW has a great profitability rating, 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. This makes ITW very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
- ITW had positive earnings in the past year.
- ITW had a positive operating cash flow in the past year.
- In the past 5 years ITW has always been profitable.
- In the past 5 years ITW always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of ITW (18.75%) is better than 96.97% of its industry peers.
- With an excellent Return On Equity value of 94.33%, ITW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- The Return On Invested Capital of ITW (24.44%) is better than 97.73% 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 10.24%.
| 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
- ITW's Profit Margin of 19.05% is amongst the best of the industry. ITW outperforms 95.45% of its industry peers.
- In the last couple of years the Profit Margin of ITW has grown nicely.
- Looking at the Operating Margin, with a value of 26.20%, ITW belongs to the top of the industry, outperforming 98.48% of the companies in the same industry.
- ITW's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 43.93%, ITW belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
- 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ITW is creating value.
- The number of shares outstanding for ITW has been reduced compared to 1 year ago.
- ITW has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ITW has an improved debt to assets ratio.
2.2 Solvency
- ITW has an Altman-Z score of 8.11. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of ITW (8.11) is better than 90.15% of its industry peers.
- ITW has a debt to FCF ratio of 3.14. This is a good value and a sign of high solvency as ITW would need 3.14 years to pay back of all of its debts.
- ITW's Debt to FCF ratio of 3.14 is fine compared to the rest of the industry. ITW outperforms 67.42% of its industry peers.
- ITW has a Debt/Equity ratio of 2.80. This is a high value indicating a heavy dependency on external 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 | 8.11 |
ROIC/WACC2.65
WACC9.21%
2.3 Liquidity
- ITW has a Current Ratio of 1.53. This is a normal value and indicates that ITW is financially healthy and should not expect problems in meeting its short term obligations.
- ITW has a worse Current ratio (1.53) than 71.21% of its industry peers.
- A Quick Ratio of 1.11 indicates that ITW should not have too much problems paying its short term obligations.
- ITW has a Quick ratio of 1.11. This is comparable to the rest of the industry: ITW outperforms 43.94% of its industry peers.
| 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.
- The Revenue has decreased by -0.41% in the past year.
- The Revenue has been growing slightly by 2.42% on average over the past years.
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
- ITW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.58% yearly.
- The Revenue is expected to grow by 3.85% on average over the next years.
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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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 quite expensively with a Price/Earnings ratio of 25.55.
- ITW's Price/Earnings ratio is in line with the industry average.
- The average S&P500 Price/Earnings ratio is at 27.47. ITW is around the same levels.
- Based on the Price/Forward Earnings ratio of 23.18, the valuation of ITW can be described as rather expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ITW is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, ITW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 23.18 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ITW is on the same level as its industry peers.
- ITW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.87 | ||
| EV/EBITDA | 18.14 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ITW does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of ITW may justify a higher PE ratio.
PEG (NY)6.69
PEG (5Y)4.78
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
- ITW has a Yearly Dividend Yield of 2.54%.
- ITW's Dividend Yield is rather good when compared to the industry average which is at 0.80. ITW pays more dividend than 90.91% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.89, ITW pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
5.2 History
- 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.98%
Div Incr Years29
Div Non Decr Years29
5.3 Sustainability
- 58.20% of the earnings are spent on dividend by ITW. 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%
263.47
+1.58 (+0.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)10-24 2025-10-24/bmo
Earnings (Next)01-29 2026-01-29/amc
Inst Owners84.97%
Inst Owner Change0.09%
Ins Owners0.24%
Ins Owner Change-8.46%
Market Cap76.43B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.55 (-0.73%)
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 | 25.55 | ||
| Fwd PE | 23.18 | ||
| P/S | 4.81 | ||
| P/FCF | 26.87 | ||
| P/OCF | 23.32 | ||
| P/B | 23.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.14 |
EPS(TTM)10.31
EY3.91%
EPS(NY)11.37
Fwd EY4.31%
FCF(TTM)9.81
FCFY3.72%
OCF(TTM)11.3
OCFY4.29%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.69
PEG (5Y)4.78
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 | 8.11 |
F-Score6
WACC9.21%
ROIC/WACC2.65
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 25.55 and the Price/Book (PB) ratio is 23.83.
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%.