ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
249.7 USD
+0.32 (+0.13%)
249.7 USD
0 (0%)
ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. ITW has an excellent profitability rating, but 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. This makes ITW very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
ITW had positive earnings in the past year.
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
ITW's Return On Assets of 18.75% is amongst the best of the industry. ITW outperforms 97.69% of its industry peers.
ITW's Return On Equity of 94.33% is amongst the best of the industry. ITW outperforms 100.00% of its industry peers.
The Return On Invested Capital of ITW (24.44%) is better than 97.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ITW is significantly above the industry average of 10.39%.
| 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.
In the last couple of years the Profit Margin of ITW has grown nicely.
ITW's Operating Margin of 26.20% is amongst the best of the industry. ITW outperforms 98.46% of its industry peers.
ITW's Operating Margin has improved in the last couple of years.
ITW's Gross Margin of 43.93% is amongst the best of the industry. ITW outperforms 81.54% of its industry peers.
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
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
ITW has an Altman-Z score of 7.94. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
ITW has a Altman-Z score of 7.94. This is amongst the best in the industry. ITW outperforms 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.
The Debt to FCF ratio of ITW (3.14) is better than 69.23% 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 | 7.94 |
ROIC/WACC2.66
WACC9.2%
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.
ITW's Quick ratio of 1.11 is in line compared to the rest of the industry. ITW outperforms 43.08% of its industry peers.
| 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.
The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
The Revenue has decreased by -0.41% in the past year.
ITW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.42% yearly.
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
A Price/Earnings ratio of 24.22 indicates a rather expensive valuation of ITW.
ITW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.46. ITW is around the same levels.
The Price/Forward Earnings ratio is 21.95, which indicates a rather expensive current valuation of ITW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ITW is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 36.10. ITW is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.22 | ||
| Fwd PE | 21.95 |
4.2 Price Multiples
ITW's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as ITW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.46 | ||
| EV/EBITDA | 17.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ITW may justify a higher PE ratio.
PEG (NY)6.33
PEG (5Y)4.53
EPS Next 2Y5.76%
EPS Next 3Y6.3%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.58%, ITW has a reasonable but not impressive dividend return.
ITW's Dividend Yield is rather good when compared to the industry average which is at 1.90. 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 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
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 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.
ITW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP58.2%
EPS Next 2Y5.76%
EPS Next 3Y6.3%
249.7
+0.32 (+0.13%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.95%
Inst Owner Change-0.11%
Ins Owners0.27%
Ins Owner Change-0.43%
Market Cap72.44B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts53.08
Price Target263.45 (5.51%)
Short Float %2.6%
Short Ratio6.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
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%
PT rev (3m)0.26%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-1.92%
EPS NY rev (1m)0.41%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.22 | ||
| Fwd PE | 21.95 | ||
| P/S | 4.56 | ||
| P/FCF | 25.46 | ||
| P/OCF | 22.1 | ||
| P/B | 22.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.35 |
EPS(TTM)10.31
EY4.13%
EPS(NY)11.37
Fwd EY4.56%
FCF(TTM)9.81
FCFY3.93%
OCF(TTM)11.3
OCFY4.52%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.33
PEG (5Y)4.53
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 | 7.94 |
F-Score6
WACC9.2%
ROIC/WACC2.66
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.