ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
252.46 USD
+0.51 (+0.2%)
252.46 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to ITW. ITW was compared to 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
ITW has a Return On Assets of 18.75%. This is amongst the best in the industry. ITW outperforms 96.97% of its industry peers.
The Return On Equity of ITW (94.33%) is better than 100.00% of its industry peers.
ITW has a better Return On Invested Capital (24.44%) 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 10.27%.
| 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.
ITW's Profit Margin has improved in the last couple of years.
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 better Gross Margin (43.93%) than 81.82% 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.
Compared to 1 year ago, ITW has less shares outstanding
Compared to 5 years ago, ITW has less shares outstanding
ITW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.99 indicates that ITW is not in any danger for bankruptcy at the moment.
ITW has a better Altman-Z score (7.99) 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.
The Debt to FCF ratio of ITW (3.14) is better than 68.18% 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.
Looking at the Debt to Equity ratio, with a value of 2.80, ITW is doing worse than 87.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.99 |
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.
ITW has a worse Current ratio (1.53) than 70.45% of its industry peers.
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.
ITW's Quick ratio of 1.11 is in line compared 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%.
Measured over the past 5 years, ITW shows a small growth in Earnings Per Share. The EPS has been growing by 5.34% on average per year.
The Revenue has decreased by -0.41% in the past year.
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
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.
Based on estimates for the next years, ITW will show a small growth in Revenue. The Revenue will grow by 3.85% on average per year.
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
The Price/Earnings ratio is 24.49, which indicates a rather expensive current valuation of ITW.
Compared to the rest of the industry, the Price/Earnings ratio of ITW is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.92. ITW is around the same levels.
A Price/Forward Earnings ratio of 22.21 indicates a rather expensive valuation of ITW.
ITW's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.46. ITW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.21 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ITW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.74 | ||
| EV/EBITDA | 17.54 |
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)6.41
PEG (5Y)4.58
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.56%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.98, ITW pays a better dividend. On top of this ITW pays more dividend than 88.64% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ITW pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
5.2 History
The dividend of ITW is nicely growing with an annual growth rate of 6.98%!
ITW has been paying a dividend for at least 10 years, so it has 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
ITW pays out 58.20% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of ITW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP58.2%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
252.46
+0.51 (+0.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.95%
Inst Owner Change-0.12%
Ins Owners0.27%
Ins Owner Change-8.46%
Market Cap73.24B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts53.08
Price Target261.55 (3.6%)
Short Float %2.77%
Short Ratio6.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP58.2%
Div Incr Years29
Div Non Decr Years29
Ex-Date
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)-0.03%
PT rev (3m)0.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.92%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.21 | ||
| P/S | 4.61 | ||
| P/FCF | 25.74 | ||
| P/OCF | 22.35 | ||
| P/B | 22.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.54 |
EPS(TTM)10.31
EY4.08%
EPS(NY)11.37
Fwd EY4.5%
FCF(TTM)9.81
FCFY3.88%
OCF(TTM)11.3
OCFY4.47%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.41
PEG (5Y)4.58
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 | 7.99 |
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
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 3.82% in the next year.