ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA - NYSE:ITW - US4523081093 - Common Stock
246.93 USD
+1.57 (+0.64%)
Taking everything into account, ITW scores 6 out of 10 in our fundamental rating. ITW was compared to 130 industry peers in the Machinery industry. While ITW has a great profitability rating, 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. 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.
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
Looking at the Return On Assets, with a value of 18.75%, ITW belongs to the top of the industry, outperforming 97.69% of the companies in the same industry.
With an excellent Return On Equity value of 94.33%, ITW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of ITW (24.44%) is better than 97.69% 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 10.27%.
| 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
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 Operating Margin of 26.20%. This is amongst the best in the industry. ITW outperforms 98.46% of its industry peers.
ITW's Operating Margin has improved in the last couple of years.
ITW has a Gross Margin of 43.93%. This is amongst the best in the industry. ITW outperforms 80.77% 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 7.91 indicates that ITW is not in any danger for bankruptcy at the moment.
ITW's Altman-Z score of 7.91 is amongst the best of the industry. ITW outperforms 90.77% 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 67.69% 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 89.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 7.91 |
ROIC/WACC2.64
WACC9.26%
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 72.31% 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'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
ITW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.59%.
Measured over the past 5 years, ITW shows a small growth in Earnings Per Share. The EPS has been growing by 5.34% on average per year.
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
Based on estimates for the next years, ITW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.58% on average per year.
The Revenue is expected to grow by 3.85% on average over the next years.
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.
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 23.95.
ITW's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.35. ITW is around the same levels.
The Price/Forward Earnings ratio is 21.71, which indicates a rather expensive current valuation of ITW.
The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
ITW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 33.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.95 | ||
| Fwd PE | 21.71 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ITW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.3 | ||
| EV/EBITDA | 17.17 |
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)6.26
PEG (5Y)4.48
EPS Next 2Y5.76%
EPS Next 3Y6.3%
5. Dividend
5.1 Amount
ITW has a Yearly Dividend Yield of 2.64%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.85, ITW pays a better dividend. On top of this ITW pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, ITW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
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 2Y5.76%
EPS Next 3Y6.3%
NYSE:ITW (11/12/2025, 1:48:33 PM)
246.93
+1.57 (+0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners84.19%
Inst Owner Change-0.56%
Ins Owners0.27%
Ins Owner Change-0.47%
Market Cap71.98B
Revenue(TTM)15.88B
Net Income(TTM)3.03B
Analysts52.31
Price Target261.63 (5.95%)
Short Float %2.38%
Short Ratio7.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
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)0.26%
PT rev (3m)0.58%
EPS NQ rev (1m)-1.95%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)0.39%
EPS NY rev (3m)1.51%
Revenue NQ rev (1m)-0.7%
Revenue NQ rev (3m)-0.53%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.95 | ||
| Fwd PE | 21.71 | ||
| P/S | 4.53 | ||
| P/FCF | 25.3 | ||
| P/OCF | 21.97 | ||
| P/B | 22.44 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.17 |
EPS(TTM)10.31
EY4.18%
EPS(NY)11.37
Fwd EY4.61%
FCF(TTM)9.76
FCFY3.95%
OCF(TTM)11.24
OCFY4.55%
SpS54.49
BVpS11.01
TBVpS-8.1
PEG (NY)6.26
PEG (5Y)4.48
Graham Number50.53
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 | 7.91 |
F-Score6
WACC9.26%
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 2Y5.76%
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.