NYSE:ITW

Stock Analysis Report

Executive Summary

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide.

Snowflake

Fundamentals

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Illinois Tool Works's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.8%

NYSE:ITW

3.4%

US Machinery

2.9%

US Market


1 Year Return

11.7%

NYSE:ITW

-6.6%

US Machinery

0.2%

US Market

ITW outperformed the Machinery industry which returned -8% over the past year.

ITW outperformed the Market in United States of America which returned -0.7% over the past year.


Share holder returns

ITWIndustryMarket
7 Day3.8%3.4%2.9%
30 Day0.1%-7.4%-2.3%
90 Day4.0%-0.1%3.1%
1 Year15.0%11.7%-4.7%-6.6%2.4%0.2%
3 Year36.4%27.3%37.3%28.3%41.7%32.4%
5 Year92.7%71.9%37.8%20.7%55.1%37.9%

Price Volatility Vs. Market

How volatile is Illinois Tool Works's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Illinois Tool Works undervalued based on future cash flows and its price relative to the stock market?

20.29x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Illinois Tool Works's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Illinois Tool Works's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Illinois Tool Works is overvalued based on earnings compared to the US Machinery industry average.

Illinois Tool Works is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

Illinois Tool Works is poor value based on expected growth next year.


Price Based on Value of Assets

Illinois Tool Works is overvalued based on assets compared to the US Machinery industry average.


Next Steps

Future Growth

How is Illinois Tool Works expected to perform in the next 1 to 3 years based on estimates from 19 analysts?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Illinois Tool Works's revenue is expected to grow by 2.7% yearly, however this is not considered high growth (20% yearly).

Illinois Tool Works's earnings are expected to grow by 4.5% yearly, however this is not considered high growth (20% yearly).

Illinois Tool Works's revenue growth is positive but not above the United States of America market average.

Illinois Tool Works's earnings growth is positive but not above the United States of America market average.

Illinois Tool Works's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Illinois Tool Works is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).


Next Steps

Past Performance

How has Illinois Tool Works performed over the past 5 years?

4.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Illinois Tool Works's year on year earnings growth rate has been positive over the past 5 years.

Illinois Tool Works's 1-year earnings growth exceeds its 5-year average (31% vs 4.8%)

Illinois Tool Works's earnings growth has exceeded the US Machinery industry average in the past year (31% vs 17.5%).


Return on Equity

Whilst Illinois Tool Works made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%), this is metric is skewed due to its high level of debt.


Return on Assets

Illinois Tool Works used its assets more efficiently than the US Machinery industry average last year based on Return on Assets.


Return on Capital Employed

Illinois Tool Works has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Illinois Tool Works's financial position?


Financial Position Analysis

Illinois Tool Works is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Illinois Tool Works's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Illinois Tool Works's level of debt (252.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (85.5% vs 252.3% today).

Debt is well covered by operating cash flow (37.8%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 16.6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.8x debt.


Next Steps

Dividend

What is Illinois Tool Works's current dividend yield, its reliability and sustainability?

2.88%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Illinois Tool Works before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Illinois Tool Works's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.49%).

Illinois Tool Works's dividend is below the markets top 25% of dividend payers in United States of America (3.85%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.9x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.8x coverage).


Next Steps

Management

What is the CEO of Illinois Tool Works's salary, the management and board of directors tenure and is there insider trading?

7.8yrs

Average management tenure


CEO

E. Santi (57yo)

6.8yrs

Tenure

US$17,708,516

Compensation

Mr. E. Scott Santi has been the Chief Executive Officer and Chairman of the Board of Illinois Tool Works Inc. since November 2012 and had been its President since October 2012 till 2015. Mr. Santi served a ...


CEO Compensation Analysis

E.'s remuneration is higher than average for companies of similar size in United States of America.

E.'s compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

7.8yrs

Average Tenure

54.5yo

Average Age

The average tenure for the Illinois Tool Works management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

8.3yrs

Average Tenure

61.5yo

Average Age

The tenure for the Illinois Tool Works board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Steve Martindale (63yo)

    Executive Vice President of Test & Measurement and Electronics Segment

    • Tenure: 10.7yrs
    • Compensation: US$2.75m
  • E. Santi (57yo)

    Chairman & CEO

    • Tenure: 6.8yrs
    • Compensation: US$17.71m
  • Juan Valls (57yo)

    Executive Vice President of Specialty Products

    • Tenure: 12.6yrs
  • Katie Lawler (53yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 4.8yrs
  • Karen Fletcher (59yo)

    Vice President of Investor Relations

    • Tenure: 1.5yrs
  • Randy Scheuneman (51yo)

    VP & Chief Accounting Officer

    • Tenure: 10.0yrs
  • Lei Schlitz (52yo)

    Executive Vice President of Food Equipment Segment

    • Tenure: 11.6yrs
  • Michael Larsen (50yo)

    Senior VP & CFO

    • Tenure: 5.9yrs
    • Compensation: US$4.88m
  • Chris O’Herlihy (55yo)

    Vice Chairman

    • Tenure: 8.8yrs
    • Compensation: US$4.80m
  • Norman Finch (54yo)

    Senior VP

    • Tenure: 2.5yrs
    • Compensation: US$3.85m

Board Members

  • Pamela Strobel (67yo)

    Independent Director

    • Tenure: 11.5yrs
    • Compensation: US$299.89k
  • Jim Skinner (75yo)

    Lead Director

    • Tenure: 2.3yrs
    • Compensation: US$324.89k
  • Rick Lenny (67yo)

    Independent Director

    • Tenure: 5.0yrs
    • Compensation: US$299.89k
  • Jim Griffith (65yo)

    Independent Director

    • Tenure: 7.4yrs
    • Compensation: US$279.89k
  • Susan Crown (60yo)

    Independent Director

    • Tenure: 25.6yrs
    • Compensation: US$284.89k
  • David H. Smith (52yo)

    Independent Director

    • Tenure: 9.7yrs
    • Compensation: US$294.89k
  • Anré Williams (53yo)

    Independent Director

    • Tenure: 9.0yrs
    • Compensation: US$279.89k
  • Dan Brutto (63yo)

    Independent Director

    • Tenure: 7.5yrs
    • Compensation: US$279.89k
  • E. Santi (57yo)

    Chairman & CEO

    • Tenure: 6.8yrs
    • Compensation: US$17.71m
  • Kevin Warren (56yo)

    Independent Director

    • Tenure: 9.0yrs
    • Compensation: US$279.89k

Company Information

Illinois Tool Works Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Illinois Tool Works Inc.
  • Ticker: ITW
  • Exchange: NYSE
  • Founded: 1912
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$49.211b
  • Shares outstanding: 323.48m
  • Website: https://www.itw.com

Number of Employees


Location

  • Illinois Tool Works Inc.
  • 155 Harlem Avenue
  • Glenview
  • Illinois
  • 60025
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ITWNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1972
ILTDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1972
ITW *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1972
0J8WLSE (London Stock Exchange)YesCommon StockGBUSDJun 1972
ITWWBAG (Wiener Boerse AG)YesCommon StockATEURJun 1972

Biography

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/21 23:38
End of Day Share Price2019/08/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.