ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
258.89 USD
+2.13 (+0.83%)
258.89 USD
0 (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. ITW also has an excellent dividend rating. With these ratings, ITW could be worth investigating further 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
- With an excellent Return On Assets value of 18.75%, ITW belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
- ITW has a better Return On Equity (94.33%) 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.
- The Average Return On Invested Capital over the past 3 years for ITW is significantly above the industry average of 10.25%.
| 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 Profit Margin of 19.05%. This is amongst the best in the industry. ITW outperforms 95.45% of its industry peers.
- In the last couple of years the Profit Margin of ITW has grown nicely.
- The Operating Margin of ITW (26.20%) is better than 98.48% of its industry peers.
- ITW's Operating Margin has improved in the last couple of years.
- The Gross Margin of ITW (43.93%) is better than 83.33% 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.
- The number of shares outstanding for ITW has been reduced compared to 1 year ago.
- Compared to 5 years ago, ITW has less shares outstanding
- Compared to 1 year ago, ITW has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.07 indicates that ITW is not in any danger for bankruptcy at the moment.
- ITW's Altman-Z score of 8.07 is amongst the best of the industry. ITW outperforms 90.15% of its industry peers.
- 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 has a better Debt to FCF ratio (3.14) than 67.42% 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.
- Looking at the Debt to Equity ratio, with a value of 2.80, ITW is doing worse than 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.07 |
ROIC/WACC2.65
WACC9.21%
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 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 (1.11) which is in line with its industry peers.
| 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.
- The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
- Looking at the last year, ITW shows a decrease in Revenue. The Revenue has decreased by -0.41% in the last 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
- Based on estimates for the next years, ITW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.58% on average per year.
- 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 2Y5.72%
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
- 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.
- 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 25.11.
- The rest of the industry has a similar Price/Earnings ratio as ITW.
- ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.33.
- Based on the Price/Forward Earnings ratio of 22.78, the valuation of ITW can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
- ITW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.11 | ||
| Fwd PE | 22.78 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ITW.
- ITW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.4 | ||
| EV/EBITDA | 17.95 |
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.
- ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.58
PEG (5Y)4.7
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.54%, ITW has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.80, ITW pays a better dividend. On top of this ITW pays more dividend than 90.91% of the companies listed in the same industry.
- ITW's Dividend Yield is a higher than the S&P500 average which is at 1.91.
| 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 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
- 58.20% 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, but earnings are growing more, so the dividend growth is sustainable.
DP58.2%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
258.89
+2.13 (+0.83%)
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 Cap75.10B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.55 (1.03%)
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 | 25.11 | ||
| Fwd PE | 22.78 | ||
| P/S | 4.73 | ||
| P/FCF | 26.4 | ||
| P/OCF | 22.92 | ||
| P/B | 23.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.95 |
EPS(TTM)10.31
EY3.98%
EPS(NY)11.37
Fwd EY4.39%
FCF(TTM)9.81
FCFY3.79%
OCF(TTM)11.3
OCFY4.36%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.58
PEG (5Y)4.7
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 | 8.07 |
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 25.11 and the Price/Book (PB) ratio is 23.41.
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%.