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%)
Taking everything into account, ITW scores 6 out of 10 in our fundamental rating. ITW was compared to 132 industry peers in the Machinery industry. While ITW has a great profitability rating, 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. 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.
- In the past 5 years ITW has always been profitable.
- ITW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- ITW's Return On Assets of 18.75% is amongst the best of the industry. ITW outperforms 96.97% of its industry peers.
- ITW has a better Return On Equity (94.33%) than 100.00% of its industry peers.
- ITW has a better Return On Invested Capital (24.44%) 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
- Looking at the Profit Margin, with a value of 19.05%, ITW belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
- 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.
- In the last couple of years the Operating Margin of ITW has grown nicely.
- The Gross Margin of ITW (43.93%) is better than 83.33% 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.
- ITW has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ITW has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.11 indicates that ITW is not in any danger for bankruptcy at the moment.
- ITW has a better Altman-Z score (8.11) than 90.15% 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.
- With a decent Debt to FCF ratio value of 3.14, ITW is doing good in 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.
- The Debt to Equity ratio of ITW (2.80) is worse than 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.11 |
ROIC/WACC2.64
WACC9.27%
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 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.
- Looking at the Quick ratio, with a value of 1.11, ITW is in line with its industry, outperforming 43.94% of the companies in the same 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.
- The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
- Looking at the last year, ITW shows a decrease in Revenue. The Revenue has decreased by -0.41% in the last 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.
- Based on estimates for the next years, ITW will show a small growth in Revenue. The Revenue will grow by 3.85% on average per year.
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
- 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.
- 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
- Based on the Price/Earnings ratio of 25.55, the valuation of ITW can be described as expensive.
- ITW's Price/Earnings is on the same level as the industry average.
- ITW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.47, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 23.18 indicates a rather expensive valuation of ITW.
- ITW's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. ITW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 23.18 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ITW.
- The rest of the industry has a similar Price/Free Cash Flow ratio as ITW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.87 | ||
| EV/EBITDA | 18.14 |
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)6.69
PEG (5Y)4.78
EPS Next 2Y5.72%
EPS Next 3Y6.23%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.46%, ITW has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.80, ITW pays a better dividend. On top of this ITW pays more dividend than 90.91% of the companies listed in the same industry.
- ITW's Dividend Yield is a higher than the S&P500 average which is at 1.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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
- 58.20% of the earnings are spent on dividend by ITW. 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%
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 Change0.09%
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)-0.72%
PT rev (3m)0.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.99%
EPS NY rev (1m)0%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.7%
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 | 18.14 |
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 | 8.11 |
F-Score6
WACC9.27%
ROIC/WACC2.64
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 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%.