ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
263.47 USD
+1.58 (+0.6%)
263.48 USD
0.01 (0%)
We assign a fundamental rating of 6 out of 10 to ITW. ITW was compared to 132 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. ITW is quite expensive at the moment. It does show a decent growth rate. ITW also has an excellent dividend rating. This makes ITW very considerable 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.
- Each year in the past 5 years ITW has 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 96.97% of the companies in the same industry.
- The Return On Equity of ITW (94.33%) is better than 100.00% of its industry peers.
- The Return On Invested Capital of ITW (24.44%) is better than 97.73% 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 10.24%.
| 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
- The Profit Margin of ITW (19.05%) is better than 95.45% 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 98.48% of the companies in the same industry.
- 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.
- 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.
- 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 8.13 indicates that ITW is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 8.13, ITW belongs to the best of the industry, outperforming 90.15% 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 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.
- 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 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.13 |
ROIC/WACC2.58
WACC9.48%
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 worse Current ratio (1.53) than 71.21% of its industry peers.
- 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 comparable to the rest of the industry.
| 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.
- 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
- 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 2Y5.72%
EPS Next 3Y6.23%
EPS Next 5Y9.58%
Revenue Next Year0.35%
Revenue Next 2Y1.85%
Revenue Next 3Y2.35%
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
- A Price/Earnings ratio of 25.55 indicates a quite expensive valuation of ITW.
- ITW's Price/Earnings is on the same level as the industry average.
- ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.38.
- The Price/Forward Earnings ratio is 23.18, which indicates a rather expensive current valuation of ITW.
- ITW's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.29, ITW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 23.18 |
4.2 Price Multiples
- ITW's Enterprise Value to EBITDA ratio is in line with the industry average.
- ITW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.87 | ||
| EV/EBITDA | 18.24 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.69
PEG (5Y)4.78
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
- ITW has a Yearly Dividend Yield of 2.46%. Purely for dividend investing, there may be better candidates out there.
- ITW's Dividend Yield is rather good when compared to the industry average which is at 0.98. ITW pays more dividend than 90.91% of the companies in the same industry.
- ITW's Dividend Yield is a higher than the S&P500 average which is at 1.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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 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
- 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 2Y5.72%
EPS Next 3Y6.23%
263.47
+1.58 (+0.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)10-24 2025-10-24/bmo
Earnings (Next)02-03 2026-02-03/amc
Inst Owners84.97%
Inst Owner Change0.06%
Ins Owners0.24%
Ins Owner Change-8.46%
Market Cap76.43B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target262.64 (-0.32%)
Short Float %2.62%
Short Ratio6.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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)-0.31%
PT rev (3m)0.65%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)-1.9%
EPS NY rev (1m)0%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.82%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 23.18 | ||
| P/S | 4.81 | ||
| P/FCF | 26.87 | ||
| P/OCF | 23.32 | ||
| P/B | 23.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.24 |
EPS(TTM)10.31
EY3.91%
EPS(NY)11.37
Fwd EY4.31%
FCF(TTM)9.81
FCFY3.72%
OCF(TTM)11.3
OCFY4.29%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.69
PEG (5Y)4.78
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 | 8.13 |
F-Score6
WACC9.48%
ROIC/WACC2.58
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 3Y2.35%
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 25.55 and the Price/Book (PB) ratio is 23.83.
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%.