ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
250.14 USD
-1.04 (-0.41%)
250.14 USD
0 (0%)
Taking everything into account, ITW scores 6 out of 10 in our fundamental rating. ITW was compared to 131 industry peers in the Machinery industry. ITW scores excellent on profitability, but 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. These ratings could make ITW a good candidate 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.
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
With an excellent Return On Assets value of 18.75%, ITW belongs to the best of the industry, outperforming 96.92% of the companies in the same industry.
The Return On Equity of ITW (94.33%) is better than 100.00% of its industry peers.
ITW has a better Return On Invested Capital (24.44%) 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 10.32%.
| 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 95.38% of its industry peers.
ITW's Profit Margin has improved in the last couple of years.
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.
In the last couple of years the Operating Margin of ITW has grown nicely.
With an excellent Gross Margin value of 43.93%, ITW belongs to the best of the industry, outperforming 81.54% of the companies in the same industry.
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.
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.
ITW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.97 indicates that ITW is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.97, 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 67.69% 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 | 7.97 |
ROIC/WACC2.62
WACC9.33%
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.
ITW has a Current ratio of 1.53. This is in the lower half of the industry: ITW underperforms 71.54% 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.
ITW shows a decrease in Revenue. In the last year, the revenue decreased by -0.41%.
Measured over the past years, ITW shows a small growth in Revenue. The Revenue has been growing by 2.42% on average per year.
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
The Earnings Per Share is expected to grow by 9.58% on average over the next years. This is quite good.
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.
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
Based on the Price/Earnings ratio of 24.26, the valuation of ITW can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as ITW.
Compared to an average S&P500 Price/Earnings ratio of 26.38, ITW is valued at the same level.
The Price/Forward Earnings ratio is 21.98, which indicates a rather expensive current valuation of ITW.
ITW's Price/Forward Earnings ratio is in line with the industry average.
ITW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.26 | ||
| Fwd PE | 21.98 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA is on the same level as 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 | 25.51 | ||
| EV/EBITDA | 17.46 |
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.
The excellent profitability rating of ITW may justify a higher PE ratio.
PEG (NY)6.36
PEG (5Y)4.54
EPS Next 2Y5.78%
EPS Next 3Y6.27%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.56%.
ITW's Dividend Yield is rather good when compared to the industry average which is at 1.04. ITW pays more dividend than 87.69% of the companies in the same industry.
ITW's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| 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
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%
250.14
-1.04 (-0.41%)
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 Cap72.57B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts53.08
Price Target263.45 (5.32%)
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%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.26 | ||
| Fwd PE | 21.98 | ||
| P/S | 4.57 | ||
| P/FCF | 25.51 | ||
| P/OCF | 22.14 | ||
| P/B | 22.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.46 |
EPS(TTM)10.31
EY4.12%
EPS(NY)11.38
Fwd EY4.55%
FCF(TTM)9.81
FCFY3.92%
OCF(TTM)11.3
OCFY4.52%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.36
PEG (5Y)4.54
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 | 7.97 |
F-Score6
WACC9.33%
ROIC/WACC2.62
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.