ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ITW - US4523081093 - Common Stock
249.525 USD
+3.22 (+1.31%)
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. While showing a medium growth rate, ITW is valued expensive at the moment. 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.
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 has a better Return On Assets (18.75%) than 96.97% 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.
Looking at the Return On Invested Capital, with a value of 24.44%, ITW belongs to the top of the industry, outperforming 97.73% 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%.
| 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.
With an excellent Operating Margin value of 26.20%, ITW belongs to the best 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.
Looking at the Gross Margin, with a value of 43.93%, ITW belongs to the top of the industry, outperforming 82.58% 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 3Y3.7%
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
ITW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, ITW has less shares outstanding
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 7.90. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 7.90, 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's Debt to FCF ratio of 3.14 is fine compared to the rest of the industry. ITW outperforms 68.18% 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's Debt to Equity ratio of 2.80 is on the low side compared to the rest of the industry. ITW is outperformed by 87.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.9 |
ROIC/WACC2.66
WACC9.2%
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.
The Current ratio of ITW (1.53) is worse than 70.45% 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 in line with 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.
ITW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.34% yearly.
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.
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 3Y2.34%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ITW is valuated rather expensively with a Price/Earnings ratio of 24.20.
Compared to the rest of the industry, the Price/Earnings ratio of ITW is on the same level as its industry peers.
ITW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.51, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 21.95, ITW is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
When comparing the Price/Forward Earnings ratio of ITW to the average of the S&P500 Index (23.13), we can say ITW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 21.95 |
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 | 25.44 | ||
| EV/EBITDA | 17.15 |
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)6.34
PEG (5Y)4.53
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.56%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.98, ITW pays a better dividend. On top of this ITW pays more dividend than 88.64% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ITW pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
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 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.
ITW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP58.2%
EPS Next 2Y5.72%
EPS Next 3Y6.23%
NYSE:ITW (1/2/2026, 3:03:43 PM)
249.525
+3.22 (+1.31%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.95%
Inst Owner Change-0.12%
Ins Owners0.27%
Ins Owner Change-8.46%
Market Cap72.39B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts53.08
Price Target261.55 (4.82%)
Short Float %2.62%
Short Ratio6.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
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)-0.03%
PT rev (3m)0.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.92%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 21.95 | ||
| P/S | 4.56 | ||
| P/FCF | 25.44 | ||
| P/OCF | 22.09 | ||
| P/B | 22.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.15 |
EPS(TTM)10.31
EY4.13%
EPS(NY)11.37
Fwd EY4.56%
FCF(TTM)9.81
FCFY3.93%
OCF(TTM)11.3
OCFY4.53%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)6.34
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 | 7.9 |
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 2Y5.72%
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 3Y2.34%
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 24.2 and the Price/Book (PB) ratio is 22.56.
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%.