ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
246.63 USD
-1.5 (-0.6%)
246.63 USD
0 (0%)
ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. ITW has an excellent profitability rating, 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. With these ratings, ITW could be worth investigating further 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.
Each year in the past 5 years ITW had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.75%, ITW belongs to the top of the industry, outperforming 96.92% 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's Return On Invested Capital of 24.44% is amongst the best of the industry. ITW outperforms 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 10.46%.
| 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's Profit Margin of 19.05% is amongst the best of the industry. ITW outperforms 95.38% of its industry peers.
ITW's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 26.20%, ITW belongs to the top 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.
Looking at the Gross Margin, with a value of 43.93%, ITW belongs to the top of the industry, outperforming 81.54% of the companies in the same industry.
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 | 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.
The number of shares outstanding for ITW has been reduced compared to 1 year ago.
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 7.93 indicates that ITW is not in any danger for bankruptcy at the moment.
ITW has a Altman-Z score of 7.93. This is amongst the best in the industry. ITW outperforms 90.77% 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.
Looking at the Debt to FCF ratio, with a value of 3.14, ITW is in the better half of the industry, outperforming 68.46% of the companies in the same industry.
ITW has a Debt/Equity ratio of 2.80. This is a high value indicating a heavy dependency on external financing.
ITW's Debt to Equity ratio of 2.80 is on the low side compared to the rest of the industry. ITW is outperformed by 88.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.93 |
ROIC/WACC2.63
WACC9.3%
2.3 Liquidity
ITW has a Current Ratio of 1.53. 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 Current ratio value of 1.53, ITW is not doing good in the industry: 72.31% of the companies in the same industry are doing better.
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 in line with 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%.
The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
ITW shows a decrease in Revenue. In the last year, the revenue decreased by -0.41%.
The Revenue has been growing slightly by 2.42% on average over the past years.
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.
The Revenue is expected to grow by 3.85% on average over the next years.
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
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
With a Price/Earnings ratio of 23.92, ITW is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as ITW.
When comparing the Price/Earnings ratio of ITW to the average of the S&P500 Index (26.28), we can say ITW is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.67, the valuation of ITW can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
When comparing the Price/Forward Earnings ratio of ITW to the average of the S&P500 Index (23.52), we can say ITW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.92 | ||
| Fwd PE | 21.67 |
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 | 25.15 | ||
| EV/EBITDA | 17.27 |
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)6.27
PEG (5Y)4.48
EPS Next 2Y5.78%
EPS Next 3Y6.27%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.58%.
ITW's Dividend Yield is rather good when compared to the industry average which is at 1.84. ITW pays more dividend than 88.46% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, ITW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
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.
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%
246.63
-1.5 (-0.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.95%
Inst Owner Change-0.09%
Ins Owners0.27%
Ins Owner Change-0.43%
Market Cap71.55B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts53.08
Price Target263.45 (6.82%)
Short Float %2.6%
Short Ratio6.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
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%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.92 | ||
| Fwd PE | 21.67 | ||
| P/S | 4.5 | ||
| P/FCF | 25.15 | ||
| P/OCF | 21.83 | ||
| P/B | 22.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.27 |
EPS(TTM)10.31
EY4.18%
EPS(NY)11.38
Fwd EY4.61%
FCF(TTM)9.81
FCFY3.98%
OCF(TTM)11.3
OCFY4.58%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.27
PEG (5Y)4.48
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 | 7.93 |
F-Score6
WACC9.3%
ROIC/WACC2.63
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.