ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
248.575 USD
+0.22 (+0.09%)
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. While ITW belongs to the best of the industry regarding profitability, 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. 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.
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 97.69% of its industry peers.
With an excellent Return On Equity value of 94.33%, ITW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of ITW (24.44%) is better than 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 10.34%.
| 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.
ITW has a better Operating Margin (26.20%) than 98.46% 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 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
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.
ITW has less shares outstanding than it did 5 years ago.
ITW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.95 indicates that ITW is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.95, ITW belongs to the best of the industry, outperforming 90.77% 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 69.23% 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 88.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.95 |
ROIC/WACC2.69
WACC9.08%
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.
Looking at the Current ratio, with a value of 1.53, ITW is doing worse than 73.08% of the companies in the same industry.
A Quick Ratio of 1.11 indicates that ITW should not have too much problems paying its short term obligations.
ITW's Quick ratio of 1.11 is in line compared to the rest of the industry. ITW outperforms 43.85% of 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.
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.
Looking at the last year, ITW shows a decrease in Revenue. The Revenue has decreased by -0.41% in the last year.
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
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 2Y5.76%
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 24.11 indicates a rather expensive valuation of ITW.
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 (25.98), we can say ITW is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.85, the valuation of ITW can be described as rather expensive.
ITW's Price/Forward Earnings is on the same level as the industry average.
ITW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.79, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.11 | ||
| Fwd PE | 21.85 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as ITW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.47 | ||
| EV/EBITDA | 17.36 |
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)6.31
PEG (5Y)4.51
EPS Next 2Y5.76%
EPS Next 3Y6.3%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.67%, ITW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.97, ITW pays a better dividend. On top of this ITW pays more dividend than 88.46% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, ITW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
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 their dividend for at least 10 years, which is a reliable track record.
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 2Y5.76%
EPS Next 3Y6.3%
NYSE:ITW (11/26/2025, 10:05:08 AM)
248.575
+0.22 (+0.09%)
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-0.43%
Market Cap72.46B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.62 (5.25%)
Short Float %2.64%
Short Ratio6.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
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)0.26%
EPS NQ rev (1m)-1.8%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0.41%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)-0.82%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.11 | ||
| Fwd PE | 21.85 | ||
| P/S | 4.56 | ||
| P/FCF | 25.47 | ||
| P/OCF | 22.11 | ||
| P/B | 22.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.36 |
EPS(TTM)10.31
EY4.15%
EPS(NY)11.37
Fwd EY4.58%
FCF(TTM)9.76
FCFY3.93%
OCF(TTM)11.24
OCFY4.52%
SpS54.49
BVpS11.01
TBVpS-8.1
PEG (NY)6.31
PEG (5Y)4.51
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 | 7.95 |
F-Score6
WACC9.08%
ROIC/WACC2.69
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.