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%)
ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. While ITW has a great profitability rating, 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. Finally ITW also has an excellent dividend rating. These ratings could make ITW a good candidate 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.
Each year in the past 5 years ITW has been profitable.
Each year in the past 5 years ITW had a positive operating cash flow.
1.2 Ratios
ITW has a better Return On Assets (18.75%) than 96.97% of its industry peers.
The Return On Equity of ITW (94.33%) is better than 100.00% of its industry peers.
ITW's Return On Invested Capital of 24.44% is amongst the best of the industry. ITW outperforms 97.73% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ITW 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
The Profit Margin of ITW (19.05%) is better than 95.45% of its industry peers.
ITW's Profit Margin has improved in the last couple of years.
ITW's Operating Margin of 26.20% is amongst the best of the industry. ITW outperforms 98.48% of its industry peers.
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 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.
ITW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ITW has been reduced compared to 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 7.98. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.98, ITW belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
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.
ITW has a Debt to Equity ratio of 2.80. This is amonst the worse of the industry: ITW underperforms 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.98 |
ROIC/WACC2.67
WACC9.16%
2.3 Liquidity
A Current Ratio of 1.53 indicates that ITW should not have too much problems paying its short term obligations.
ITW's Current ratio of 1.53 is on the low side compared to the rest of the industry. ITW is outperformed by 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 has a Quick ratio (1.11) which 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
The Earnings Per Share has been growing slightly by 2.59% over the past year.
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.
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 2Y5.78%
EPS Next 3Y6.27%
EPS Next 5Y9.58%
Revenue Next Year0.36%
Revenue Next 2Y1.87%
Revenue Next 3Y2.36%
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.
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 24.49, the valuation of ITW can be described as rather expensive.
ITW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.57. ITW is around the same levels.
ITW is valuated rather expensively with a Price/Forward Earnings ratio of 22.19.
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 24.04, ITW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.19 |
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 | 17.51 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.41
PEG (5Y)4.58
EPS Next 2Y5.78%
EPS Next 3Y6.27%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.56%, ITW has a reasonable but not impressive dividend return.
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
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 2Y5.78%
EPS Next 3Y6.27%
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)0.7%
PT rev (3m)0.96%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)-1.92%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.43%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.77%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.19 | ||
| P/S | 4.61 | ||
| P/FCF | 25.74 | ||
| P/OCF | 22.35 | ||
| P/B | 22.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.51 |
EPS(TTM)10.31
EY4.08%
EPS(NY)11.38
Fwd EY4.51%
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 | 7.98 |
F-Score6
WACC9.16%
ROIC/WACC2.67
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 2Y5.78%
EPS Next 3Y6.27%
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 2Y1.87%
Revenue Next 3Y2.36%
Revenue Next 5Y3.85%
EBIT growth 1Y-1.4%
EBIT growth 3Y7.04%
EBIT growth 5Y4.62%
EBIT Next Year8.69%
EBIT Next 3Y6.44%
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.