ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - NYSE:ITW - US4523081093 - Common Stock
241.07 USD
-0.86 (-0.36%)
Taking everything into account, ITW scores 6 out of 10 in our fundamental rating. ITW was compared to 130 industry peers in the Machinery industry. ITW scores excellent on profitability, but there are some minor concerns on its financial health. ITW is valied quite expensively at the moment, while it does show a decent growth rate. ITW also has an excellent dividend rating. These ratings would make ITW suitable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year ITW was profitable.
In the past year ITW had a positive cash flow from operations.
Each year in the past 5 years ITW has been profitable.
ITW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.75%, ITW belongs to the top of the industry, outperforming 97.69% of the companies in the same industry.
ITW's Return On Equity of 94.33% is amongst the best of the industry. ITW outperforms 100.00% of its industry peers.
ITW has a Return On Invested Capital of 24.44%. This is amongst the best in the industry. ITW outperforms 97.69% 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 has a better Profit Margin (19.05%) than 96.15% of its industry peers.
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 98.46% of the companies in the same industry.
ITW's Operating Margin has improved in the last couple of years.
The Gross Margin of ITW (43.93%) is better than 81.54% 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
ITW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.85 indicates that ITW is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.85, ITW belongs to the top of the industry, outperforming 90.77% of the companies in the same industry.
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.
ITW's Debt to FCF ratio of 3.14 is fine compared to the rest of the industry. ITW outperforms 68.46% 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.
ITW has a Debt to Equity ratio of 2.80. This is amonst the worse of the industry: ITW underperforms 89.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.85 |
ROIC/WACC2.65
WACC9.22%
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 Current ratio of 1.53. This is in the lower half of the industry: ITW underperforms 73.08% of its industry peers.
A Quick Ratio of 1.11 indicates that ITW should not have too much problems paying its short term obligations.
The Quick ratio of ITW (1.11) is comparable to the rest of the 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%.
The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
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.
The Revenue is expected to grow by 3.85% on average over the next years.
EPS Next Y3.82%
EPS Next 2Y5.76%
EPS Next 3Y6.3%
EPS Next 5Y9.58%
Revenue Next Year0.36%
Revenue Next 2Y1.85%
Revenue Next 3Y2.36%
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.
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
A Price/Earnings ratio of 23.38 indicates a rather expensive valuation of ITW.
ITW's Price/Earnings is on the same level as the industry average.
ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.47.
With a Price/Forward Earnings ratio of 21.19, ITW is valued on the expensive side.
ITW's Price/Forward Earnings ratio is in line with the industry average.
ITW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.38 | ||
| Fwd PE | 21.19 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as ITW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.7 | ||
| EV/EBITDA | 16.89 |
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)6.12
PEG (5Y)4.38
EPS Next 2Y5.76%
EPS Next 3Y6.3%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.63%, ITW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.87, ITW pays a better dividend. On top of this ITW pays more dividend than 89.23% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ITW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
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 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 2Y5.76%
EPS Next 3Y6.3%
NYSE:ITW (11/19/2025, 2:58:31 PM)
241.07
-0.86 (-0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.19%
Inst Owner Change-0.11%
Ins Owners0.27%
Ins Owner Change-0.68%
Market Cap70.27B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.63 (8.53%)
Short Float %2.64%
Short Ratio6.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
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)0.26%
PT rev (3m)0.58%
EPS NQ rev (1m)-1.8%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0.39%
EPS NY rev (3m)1.51%
Revenue NQ rev (1m)-0.82%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.38 | ||
| Fwd PE | 21.19 | ||
| P/S | 4.42 | ||
| P/FCF | 24.7 | ||
| P/OCF | 21.44 | ||
| P/B | 21.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.89 |
EPS(TTM)10.31
EY4.28%
EPS(NY)11.37
Fwd EY4.72%
FCF(TTM)9.76
FCFY4.05%
OCF(TTM)11.24
OCFY4.66%
SpS54.49
BVpS11.01
TBVpS-8.1
PEG (NY)6.12
PEG (5Y)4.38
Graham Number50.53
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 | 7.85 |
F-Score6
WACC9.22%
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 2Y5.76%
EPS Next 3Y6.3%
EPS Next 5Y9.58%
Revenue 1Y (TTM)-0.41%
Revenue growth 3Y3.22%
Revenue growth 5Y2.42%
Sales Q2Q%2.34%
Revenue Next Year0.36%
Revenue Next 2Y1.85%
Revenue Next 3Y2.36%
Revenue Next 5Y3.85%
EBIT growth 1Y-1.4%
EBIT growth 3Y7.04%
EBIT growth 5Y4.62%
EBIT Next Year8.9%
EBIT Next 3Y6.5%
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.