ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
249.28 USD
+0.29 (+0.12%)
249.28 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to ITW. 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. 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.
ITW had positive earnings in each of the past 5 years.
In the past 5 years ITW always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ITW (18.75%) is better than 97.69% of its industry peers.
Looking at the Return On Equity, with a value of 94.33%, ITW belongs to the top 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.
Measured over the past 3 years, the Average Return On Invested Capital for ITW is significantly above the industry average of 10.35%.
| 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 96.15% of its industry peers.
ITW's Profit Margin has improved in the last couple of years.
ITW has a Operating Margin of 26.20%. This is amongst the best in the industry. ITW outperforms 98.46% of its industry peers.
ITW's Operating Margin has improved in the last couple of years.
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.
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.
ITW has less shares outstanding than it did 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
ITW has an Altman-Z score of 7.95. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ITW (7.95) is better than 90.77% of its industry peers.
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.
With a decent Debt to FCF ratio value of 3.14, ITW is doing good in the industry, outperforming 69.23% 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.
Looking at the Debt to Equity ratio, with a value of 2.80, ITW is doing worse than 88.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.95 |
ROIC/WACC2.69
WACC9.08%
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 73.08% 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
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.
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 2Y5.76%
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
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
With a Price/Earnings ratio of 24.18, ITW is valued on the expensive side.
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 26.31.
ITW is valuated rather expensively with a Price/Forward Earnings ratio of 21.91.
ITW's Price/Forward Earnings ratio is in line with the industry average.
ITW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.18 | ||
| Fwd PE | 21.91 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA is on the same level as the industry average.
ITW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.54 | ||
| EV/EBITDA | 17.4 |
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)6.32
PEG (5Y)4.53
EPS Next 2Y5.76%
EPS Next 3Y6.3%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.59%.
ITW's Dividend Yield is rather good when compared to the industry average which is at 1.97. ITW pays more dividend than 88.46% of the companies in the same industry.
ITW's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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.
The dividend of ITW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP58.2%
EPS Next 2Y5.76%
EPS Next 3Y6.3%
249.28
+0.29 (+0.12%)
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 Cap72.32B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.62 (4.95%)
Short Float %2.64%
Short Ratio6.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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 | 24.18 | ||
| Fwd PE | 21.91 | ||
| P/S | 4.58 | ||
| P/FCF | 25.54 | ||
| P/OCF | 22.17 | ||
| P/B | 22.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.4 |
EPS(TTM)10.31
EY4.14%
EPS(NY)11.37
Fwd EY4.56%
FCF(TTM)9.76
FCFY3.92%
OCF(TTM)11.24
OCFY4.51%
SpS54.49
BVpS11.01
TBVpS-8.1
PEG (NY)6.32
PEG (5Y)4.53
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.