ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
259.94 USD
+5.49 (+2.16%)
260.8 USD
+0.86 (+0.33%)
ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 valied quite expensively at the moment, while it does show a decent growth rate. Finally ITW also has an excellent dividend rating. These ratings would make ITW suitable 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.
- 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 96.97% of the companies in the same industry.
- ITW has a better Return On Equity (94.33%) than 100.00% of its industry peers.
- ITW's Return On Invested Capital of 24.44% is amongst the best of the industry. ITW outperforms 97.73% 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 10.24%.
| 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
- ITW has a better Profit Margin (19.05%) than 95.45% 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 98.48% of its industry peers.
- In the last couple of years the Operating Margin of ITW has grown nicely.
- Looking at the Gross Margin, with a value of 43.93%, ITW belongs to the top of the industry, outperforming 83.33% 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
- 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.
- 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 8.09 indicates that ITW is not in any danger for bankruptcy at the moment.
- ITW's Altman-Z score of 8.09 is amongst the best of the industry. ITW outperforms 89.39% 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.
- Looking at the Debt to FCF ratio, with a value of 3.14, ITW is in the better half of the industry, outperforming 67.42% of the companies in the same industry.
- A Debt/Equity ratio of 2.80 is on the high side and indicates that ITW has dependencies on debt financing.
- ITW has a worse Debt to Equity ratio (2.80) than 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.09 |
ROIC/WACC2.57
WACC9.51%
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.
- 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%.
- ITW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.34% yearly.
- The Revenue has decreased by -0.41% in the past year.
- 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 2Y5.72%
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
- The Price/Earnings ratio is 25.21, which means the current valuation is very expensive for ITW.
- Compared to the rest of the industry, the Price/Earnings ratio of ITW is on the same level as its industry peers.
- ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.32.
- With a Price/Forward Earnings ratio of 22.87, ITW is valued on the expensive side.
- ITW's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of ITW to the average of the S&P500 Index (24.30), we can say ITW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 22.87 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ITW is on the same level as its industry peers.
- ITW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.51 | ||
| EV/EBITDA | 18.02 |
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)6.6
PEG (5Y)4.72
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 1.86.
| 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 been paying a dividend for at least 10 years, so it has 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
- 58.20% of the earnings are spent on dividend by ITW. 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%
259.94
+5.49 (+2.16%)
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 Cap75.41B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target262.64 (1.04%)
Short Float %2.87%
Short Ratio7
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 | 25.21 | ||
| Fwd PE | 22.87 | ||
| P/S | 4.75 | ||
| P/FCF | 26.51 | ||
| P/OCF | 23.01 | ||
| P/B | 23.51 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.02 |
EPS(TTM)10.31
EY3.97%
EPS(NY)11.37
Fwd EY4.37%
FCF(TTM)9.81
FCFY3.77%
OCF(TTM)11.3
OCFY4.35%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.6
PEG (5Y)4.72
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 | 8.09 |
F-Score6
WACC9.51%
ROIC/WACC2.57
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 25.21 and the Price/Book (PB) ratio is 23.51.
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%.