ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
NYSE:ITW • US4523081093
290.63 USD
+0.35 (+0.12%)
At close: Feb 27, 2026
290.63 USD
0 (0%)
After Hours: 2/27/2026, 8:11:56 PM
We assign a fundamental rating of 6 out of 10 to ITW. ITW was compared to 130 industry peers in the Machinery industry. ITW scores excellent on profitability, but 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. With these ratings, ITW could be worth investigating further 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.
- Each year in the past 5 years ITW has been profitable.
- Of the past 5 years ITW 4 years had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 18.75%, ITW belongs to the best of the industry, outperforming 97.69% of the companies in the same industry.
- ITW has a Return On Equity of 94.33%. This is amongst the best in the industry. ITW outperforms 100.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 24.43%, ITW belongs to the top of the industry, outperforming 97.69% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ITW is significantly above the industry average of 10.27%.
- The 3 year average ROIC (28.88%) for ITW is well above the current ROIC(24.43%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROIC | 24.43% |
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
1.3 Margins
- With an excellent Profit Margin value of 19.05%, ITW belongs to the best of the industry, outperforming 96.15% of the companies in the same industry.
- ITW's Profit Margin has improved in the last couple of years.
- ITW has a better Operating Margin (26.20%) than 97.69% 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 83.08% 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 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
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.
- Compared to 1 year ago, ITW has a worse debt to assets ratio.
2.2 Solvency
- ITW has an Altman-Z score of 8.50. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
- ITW has a better Altman-Z score (8.50) than 93.08% of its industry peers.
- 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.
- The Debt to FCF ratio of ITW (3.14) is better than 64.62% 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 worse Debt to Equity ratio (2.80) than 87.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.5 |
ROIC/WACC2.77
WACC8.82%
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.
- 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.
- Looking at the Quick ratio, with a value of 1.11, ITW is doing worse than 60.77% of the companies in the same 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 3.15%.
- The Earnings Per Share has been growing by 9.61% on average over the past years. This is quite good.
- Looking at the last year, ITW shows a small growth in Revenue. The Revenue has grown by 0.92% in the last year.
- Measured over the past years, ITW shows a small growth in Revenue. The Revenue has been growing by 4.99% on average per year.
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
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 8.86% on average per year.
- ITW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.41% yearly.
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y8.86%
Revenue Next Year3.38%
Revenue Next 2Y3.41%
Revenue Next 3Y3.37%
Revenue Next 5Y4.41%
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 stable.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 27.71, ITW can be considered very expensive at the moment.
- ITW's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.07. ITW is around the same levels.
- With a Price/Forward Earnings ratio of 25.56, ITW can be considered very expensive at the moment.
- ITW's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.05, ITW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.71 | ||
| Fwd PE | 25.56 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.64 | ||
| EV/EBITDA | 19.97 |
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)3.29
PEG (5Y)2.88
EPS Next 2Y7.81%
EPS Next 3Y8.91%
5. Dividend
5.1 Amount
- ITW has a Yearly Dividend Yield of 2.22%.
- Compared to an average industry Dividend Yield of 1.13, ITW pays a better dividend. On top of this ITW pays more dividend than 90.77% of the companies listed in the same industry.
- ITW's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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.
- The dividend of ITW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP58.2%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
290.63
+0.35 (+0.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03 2026-02-03/bmo
Earnings (Next)04-28 2026-04-28/bmo
Inst Owners84.97%
Inst Owner Change0.36%
Ins Owners0.24%
Ins Owner Change-5.89%
Market Cap84.31B
Revenue(TTM)16.04B
Net Income(TTM)3.03B
Analysts52.31
Price Target279.29 (-3.9%)
Short Float %2.75%
Short Ratio5.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP58.2%
Div Incr Years29
Div Non Decr Years29
Ex-Date03-31 2026-03-31 (1.61)
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)6.34%
PT rev (3m)6.75%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.71 | ||
| Fwd PE | 25.56 | ||
| P/S | 5.31 | ||
| P/FCF | 29.64 | ||
| P/OCF | 25.73 | ||
| P/B | 26.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.97 |
EPS(TTM)10.49
EY3.61%
EPS(NY)11.37
Fwd EY3.91%
FCF(TTM)9.81
FCFY3.37%
OCF(TTM)11.3
OCFY3.89%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)3.29
PEG (5Y)2.88
Graham Number51.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROCE | 34.67% | ||
| ROIC | 24.43% | ||
| ROICexc | 26.26% | ||
| ROICexgc | 47.72% | ||
| OM | 26.2% | ||
| PM (TTM) | 19.05% | ||
| GM | 43.93% | ||
| FCFM | 17.91% |
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
ROICexc(3y)31.54%
ROICexc(5y)28.97%
ROICexgc(3y)68.5%
ROICexgc(5y)61.67%
ROCE(3y)38.38%
ROCE(5y)35.46%
ROICexgc growth 3Y12.09%
ROICexgc growth 5Y10.24%
ROICexc growth 3Y7.34%
ROICexc growth 5Y8.51%
OM growth 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
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 | 8.5 |
F-Score6
WACC8.82%
ROIC/WACC2.77
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y8.86%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
Revenue Next Year3.38%
Revenue Next 2Y3.41%
Revenue Next 3Y3.37%
Revenue Next 5Y4.41%
EBIT growth 1Y-1.4%
EBIT growth 3Y3.61%
EBIT growth 5Y7.9%
EBIT Next Year15.3%
EBIT Next 3Y8.07%
EBIT Next 5Y7.1%
FCF growth 1Y3.23%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.21%
OCF growth 3YN/A
OCF growth 5YN/A
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 27.71 and the Price/Book (PB) ratio is 26.28.
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%.