ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - NYSE:ITW - US4523081093 - Common Stock
244.92 USD
+1.79 (+0.74%)
245.1 USD
+0.18 (+0.07%)
Overall ITW gets a fundamental rating of 6 out of 10. We evaluated ITW against 130 industry peers in the Machinery industry. While ITW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, ITW is valued expensive at the moment. ITW also has an excellent dividend rating. This makes ITW very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year ITW was profitable.
ITW had a positive operating cash flow in the past year.
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
ITW has a Return On Assets of 20.97%. This is amongst the best in the industry. ITW outperforms 100.00% of its industry peers.
The Return On Equity of ITW (104.83%) is better than 100.00% of its industry peers.
The Return On Invested Capital of ITW (23.99%) is better than 97.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ITW is significantly above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.97% | ||
| ROE | 104.83% | ||
| ROIC | 23.99% |
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
The Profit Margin of ITW (21.31%) is better than 97.69% of its industry peers.
ITW's Profit Margin has improved in the last couple of years.
ITW has a better Operating Margin (25.98%) than 98.46% of its industry peers.
ITW's Operating Margin has improved in the last couple of years.
The Gross Margin of ITW (43.74%) is better than 80.77% of its industry peers.
In the last couple of years the Gross Margin of ITW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.98% | ||
| PM (TTM) | 21.31% | ||
| GM | 43.74% |
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.
Compared to 1 year ago, ITW has less shares outstanding
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
ITW has an Altman-Z score of 7.91. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
ITW has a better Altman-Z score (7.91) than 90.77% of its industry peers.
The Debt to FCF ratio of ITW is 3.28, which is a good value as it means it would take ITW, 3.28 years of fcf income to pay off all of its debts.
ITW has a better Debt to FCF ratio (3.28) than 65.38% of its industry peers.
ITW has a Debt/Equity ratio of 2.78. This is a high value indicating a heavy dependency on external financing.
ITW has a worse Debt to Equity ratio (2.78) than 89.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.78 | ||
| Debt/FCF | 3.28 | ||
| Altman-Z | 7.91 |
ROIC/WACC2.58
WACC9.29%
2.3 Liquidity
A Current Ratio of 1.59 indicates that ITW should not have too much problems paying its short term obligations.
ITW has a Current ratio of 1.59. This is in the lower half of the industry: ITW underperforms 69.23% of its industry peers.
ITW has a Quick Ratio of 1.15. 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 1.15, ITW perfoms like the industry average, outperforming 43.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.15 |
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 small growth in Earnings Per Share. The EPS will grow by 7.83% on average per year.
The Revenue is expected to grow by 3.58% on average over the next years.
EPS Next Y3.4%
EPS Next 2Y5.76%
EPS Next 3Y6.25%
EPS Next 5Y7.83%
Revenue Next Year0.68%
Revenue Next 2Y2.08%
Revenue Next 3Y2.48%
Revenue Next 5Y3.58%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.76, the valuation of ITW can be described as rather expensive.
ITW's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of ITW to the average of the S&P500 Index (26.03), we can say ITW is valued inline with the index average.
A Price/Forward Earnings ratio of 21.53 indicates a rather expensive valuation of ITW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ITW is on the same level as its industry peers.
ITW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.76 | ||
| Fwd PE | 21.53 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA ratio is in line with the industry average.
ITW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.21 | ||
| EV/EBITDA | 17.39 |
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)6.98
PEG (5Y)4.45
EPS Next 2Y5.76%
EPS Next 3Y6.25%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.64%.
Compared to an average industry Dividend Yield of 1.82, ITW pays a better dividend. On top of this ITW pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, ITW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
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 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
51.65% of the earnings are spent on dividend by ITW. This is a bit on the high side, but may be sustainable.
The dividend of ITW is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP51.65%
EPS Next 2Y5.76%
EPS Next 3Y6.25%
244.92
+1.79 (+0.74%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.19%
Inst Owner Change-0.4%
Ins Owners0.27%
Ins Owner Change-0.26%
Market Cap71.39B
Revenue(TTM)15.88B
Net Income(TTM)3.37B
Analysts52.59
Price Target261.63 (6.82%)
Short Float %2.38%
Short Ratio7.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP51.65%
Div Incr Years29
Div Non Decr Years29
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.06%
Min EPS beat(2)-0.33%
Max EPS beat(2)0.45%
EPS beat(4)3
Avg EPS beat(4)1.17%
Min EPS beat(4)-0.33%
Max EPS beat(4)3.83%
EPS beat(8)6
Avg EPS beat(8)1.33%
EPS beat(12)10
Avg EPS beat(12)2.79%
EPS beat(16)13
Avg EPS beat(16)2.45%
Revenue beat(2)0
Avg Revenue beat(2)-0.66%
Min Revenue beat(2)-1.06%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-1.49%
Min Revenue beat(4)-2.36%
Max Revenue beat(4)-0.27%
Revenue beat(8)0
Avg Revenue beat(8)-1.82%
Revenue beat(12)2
Avg Revenue beat(12)-1.16%
Revenue beat(16)5
Avg Revenue beat(16)-0.52%
PT rev (1m)0.26%
PT rev (3m)3.03%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)0.61%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)1.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.61%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.76 | ||
| Fwd PE | 21.53 | ||
| P/S | 4.52 | ||
| P/FCF | 26.21 | ||
| P/OCF | 22.69 | ||
| P/B | 22.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.39 |
EPS(TTM)10.31
EY4.21%
EPS(NY)11.37
Fwd EY4.64%
FCF(TTM)9.34
FCFY3.82%
OCF(TTM)10.8
OCFY4.41%
SpS54.17
BVpS11.01
TBVpS-8.19
PEG (NY)6.98
PEG (5Y)4.45
Graham Number50.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.97% | ||
| ROE | 104.83% | ||
| ROCE | 33.86% | ||
| ROIC | 23.99% | ||
| ROICexc | 25.49% | ||
| ROICexgc | 45.94% | ||
| OM | 25.98% | ||
| PM (TTM) | 21.31% | ||
| GM | 43.74% | ||
| FCFM | 17.25% |
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 | 2.78 | ||
| Debt/FCF | 3.28 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 105.75% | ||
| Cap/Sales | 2.68% | ||
| Interest Coverage | 15.19 | ||
| Cash Conversion | 69.9% | ||
| Profit Quality | 80.95% | ||
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 7.91 |
F-Score6
WACC9.29%
ROIC/WACC2.58
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 Y3.4%
EPS Next 2Y5.76%
EPS Next 3Y6.25%
EPS Next 5Y7.83%
Revenue 1Y (TTM)-0.41%
Revenue growth 3Y3.22%
Revenue growth 5Y2.42%
Sales Q2Q%2.34%
Revenue Next Year0.68%
Revenue Next 2Y2.08%
Revenue Next 3Y2.48%
Revenue Next 5Y3.58%
EBIT growth 1Y-3.23%
EBIT growth 3Y7.04%
EBIT growth 5Y4.62%
EBIT Next Year8.9%
EBIT Next 3Y6.5%
EBIT Next 5Y6.07%
FCF growth 1Y5.3%
FCF growth 3Y7.95%
FCF growth 5Y1.28%
OCF growth 1Y3.45%
OCF growth 3Y8.67%
OCF growth 5Y1.84%
ILLINOIS TOOL WORKS / ITW FAQ
Can you provide the ChartMill fundamental rating for ILLINOIS TOOL WORKS?
ChartMill assigns a fundamental rating of 6 / 10 to ITW.
What is the valuation status of ILLINOIS TOOL WORKS (ITW) stock?
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.
Can you provide the financial health for ITW stock?
The financial health rating of ILLINOIS TOOL WORKS (ITW) is 6 / 10.
What is the expected EPS growth for ILLINOIS TOOL WORKS (ITW) stock?
The Earnings per Share (EPS) of ILLINOIS TOOL WORKS (ITW) is expected to grow by 3.4% in the next year.