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Illinois Tool Works

NYSE:ITW
Snowflake Description

Solid track record established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ITW
NYSE
$50B
Market Cap
  1. Home
  2. US
  3. Capital Goods
Company description

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. The last earnings update was 52 days ago. More info.


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ITW Share Price and Events
7 Day Returns
3.2%
NYSE:ITW
3.5%
US Machinery
2%
US Market
1 Year Returns
7.9%
NYSE:ITW
5.4%
US Machinery
4.3%
US Market
ITW Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Illinois Tool Works (ITW) 3.2% 4.3% 6.1% 7.9% 54.1% 73.7%
US Machinery 3.5% 7.1% 5.3% 5.4% 54.5% 25.6%
US Market 2% 4.1% 4.2% 4.3% 43.9% 40.8%
1 Year Return vs Industry and Market
  • ITW outperformed the Machinery industry which returned 5.4% over the past year.
  • ITW outperformed the Market in United States of America which returned 4.3% over the past year.
Price Volatility
ITW
Industry
5yr Volatility vs Market
Related Companies

ITW Value

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

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Illinois Tool Works to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Illinois Tool Works.

NYSE:ITW Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 19 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.5%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:ITW
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Machinery Unlevered Beta Simply Wall St/ S&P Global 1.07
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.068 (1 + (1- 21%) (16.02%))
1.136
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.14
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.136 * 5.96%)
9.5%

Discounted Cash Flow Calculation for NYSE:ITW using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Illinois Tool Works is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:ITW DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 9.5%)
2019 2,815.99 Analyst x7 2,571.65
2020 2,820.59 Analyst x7 2,352.35
2021 2,945.04 Analyst x5 2,243.04
2022 3,006.95 Analyst x2 2,091.48
2023 3,201.00 Analyst x1 2,033.27
2024 3,317.34 Est @ 3.63% 1,924.33
2025 3,428.90 Est @ 3.36% 1,816.46
2026 3,537.71 Est @ 3.17% 1,711.49
2027 3,645.26 Est @ 3.04% 1,610.51
2028 3,752.69 Est @ 2.95% 1,514.12
Present value of next 10 years cash flows $19,868.70
NYSE:ITW DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $3,752.69 × (1 + 2.73%) ÷ (9.5% – 2.73%)
$56,935.56
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $56,935.56 ÷ (1 + 9.5%)10
$22,972.08
NYSE:ITW Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $19,868.70 + $22,972.08
$42,840.78
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $42,840.78 / 325.78
$131.5
NYSE:ITW Discount to Share Price
Calculation Result
Value per share (USD) From above. $131.50
Current discount Discount to share price of $152.05
= -1 x ($152.05 - $131.50) / $131.50
-15.6%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Illinois Tool Works is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Illinois Tool Works's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Illinois Tool Works's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:ITW PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $7.56
NYSE:ITW Share Price ** NYSE (2019-06-24) in USD $152.05
United States of America Machinery Industry PE Ratio Median Figure of 99 Publicly-Listed Machinery Companies 20.9x
United States of America Market PE Ratio Median Figure of 3,095 Publicly-Listed Companies 17.88x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Illinois Tool Works.

NYSE:ITW PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:ITW Share Price ÷ EPS (both in USD)

= 152.05 ÷ 7.56

20.11x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Illinois Tool Works is good value 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
Does Illinois Tool Works's expected growth come at a high price?
Raw Data
NYSE:ITW PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 20.11x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 19 Analysts
4%per year
United States of America Machinery Industry PEG Ratio Median Figure of 80 Publicly-Listed Machinery Companies 1.47x
United States of America Market PEG Ratio Median Figure of 2,134 Publicly-Listed Companies 1.54x

*Line of best fit is calculated by linear regression .

NYSE:ITW PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 20.11x ÷ 4%

5.06x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Illinois Tool Works is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Illinois Tool Works's assets?
Raw Data
NYSE:ITW PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $9.81
NYSE:ITW Share Price * NYSE (2019-06-24) in USD $152.05
United States of America Machinery Industry PB Ratio Median Figure of 127 Publicly-Listed Machinery Companies 2.31x
United States of America Market PB Ratio Median Figure of 5,255 Publicly-Listed Companies 1.8x
NYSE:ITW PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:ITW Share Price ÷ Book Value per Share (both in USD)

= 152.05 ÷ 9.81

15.5x

* Primary Listing of Illinois Tool Works.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Illinois Tool Works is overvalued based on assets compared to the US Machinery industry average.
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Value checks
We assess Illinois Tool Works's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Machinery industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Machinery industry average (and greater than 0)? (1 check)
  5. Illinois Tool Works has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

ITW Future Performance

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

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
4%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Illinois Tool Works expected to grow at an attractive rate?
  • Illinois Tool Works's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Illinois Tool Works's earnings growth is positive but not above the United States of America market average.
  • Illinois Tool Works's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:ITW Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:ITW Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 19 Analysts 4%
NYSE:ITW Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 19 Analysts 2.5%
United States of America Machinery Industry Earnings Growth Rate Market Cap Weighted Average 10.2%
United States of America Machinery Industry Revenue Growth Rate Market Cap Weighted Average 3.2%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:ITW Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 19 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:ITW Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 16,839 3,537 3,174 1
2022-12-31 15,823 3,327 2,908 3
2021-12-31 15,292 3,213 2,779 11
2020-12-31 15,002 3,116 2,698 19
2019-12-31 14,672 3,148 2,590 18
NYSE:ITW Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 14,576 2,889 2,508
2018-12-31 14,768 2,811 2,563
2018-09-30 14,817 2,697 1,880
2018-06-30 14,819 2,633 1,882
2018-03-31 14,587 2,477 1,803
2017-12-31 14,314 2,402 1,687
2017-09-30 14,084 2,371 2,270
2017-06-30 13,964 2,215 2,165
2017-03-31 13,796 2,286 2,103
2016-12-31 13,599 2,302 2,035
2016-09-30 13,475 2,341 1,978
2016-06-30 13,334 2,423 1,954

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Illinois Tool Works's earnings are expected to grow by 4% yearly, however this is not considered high growth (20% yearly).
  • Illinois Tool Works's revenue is expected to grow by 2.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:ITW Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 19 Analyst Estimates (S&P Global) See Below

All data from Illinois Tool Works Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ITW Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 10.45 10.45 10.45 1.00
2022-12-31 9.59 9.85 9.32 2.00
2021-12-31 8.94 9.25 8.50 12.00
2020-12-31 8.45 9.05 8.05 21.00
2019-12-31 7.93 8.19 7.75 21.00
NYSE:ITW Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 7.56
2018-12-31 7.65
2018-09-30 5.56
2018-06-30 5.52
2018-03-31 5.26
2017-12-31 4.90
2017-09-30 6.57
2017-06-30 6.22
2017-03-31 5.99
2016-12-31 5.73
2016-09-30 5.51
2016-06-30 5.40

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Illinois Tool Works is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).
X
Future performance checks
We assess Illinois Tool Works's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Illinois Tool Works has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

ITW Past Performance

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

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Illinois Tool Works's growth in the last year to its industry (Machinery).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • 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 (39.1% vs 4.5%)
  • Illinois Tool Works's earnings growth has exceeded the US Machinery industry average in the past year (39.1% vs 28.5%).
Earnings and Revenue History
Illinois Tool Works's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Illinois Tool Works Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ITW Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 14,576.00 2,508.00 2,369.00
2018-12-31 14,768.00 2,563.00 2,371.00
2018-09-30 14,817.00 1,880.00 2,400.00
2018-06-30 14,819.00 1,882.00 2,421.00
2018-03-31 14,587.00 1,803.00 2,404.00
2017-12-31 14,314.00 1,687.00 2,403.00
2017-09-30 14,084.00 2,270.00 2,395.00
2017-06-30 13,964.00 2,165.00 2,412.00
2017-03-31 13,796.00 2,103.00 2,424.00
2016-12-31 13,599.00 2,035.00 2,403.00
2016-09-30 13,475.00 1,978.00 2,416.00
2016-06-30 13,334.00 1,954.00 2,393.00
2016-03-31 13,337.00 1,909.00 2,398.00
2015-12-31 13,405.00 1,899.00 2,417.00
2015-09-30 13,634.00 1,910.00 2,463.00
2015-06-30 13,972.00 1,906.00 2,557.00
2015-03-31 14,257.00 1,920.00 2,612.00
2014-12-31 14,484.00 1,890.00 2,678.00
2014-09-30 14,534.00 1,836.00 2,723.00
2014-06-30 14,410.00 1,735.00 2,724.00
2014-03-31 14,284.00 1,657.00 2,794.00
2013-12-31 14,135.00 1,630.00 2,815.00
2013-09-30 14,065.00 2,144.00 2,847.00
2013-06-30 14,230.00 2,183.00 2,884.00
2013-03-31 13,853.00 2,170.00 2,799.00
2012-12-31 14,791.00 2,233.00 2,928.00
2012-09-30 15,627.00 1,749.00 3,013.00
2012-06-30 16,474.00 1,794.00 3,136.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • 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.
  • Illinois Tool Works used its assets more efficiently than the US Machinery industry average last year based on Return on Assets.
  • Illinois Tool Works has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Illinois Tool Works's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Machinery industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Illinois Tool Works has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

ITW Health

 How is Illinois Tool Works's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Illinois Tool Works's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • 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.
Balance sheet
This treemap shows a more detailed breakdown of Illinois Tool Works's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0.8x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Illinois Tool Works Company Filings, last reported 2 months ago.

NYSE:ITW Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 3,200.00 7,741.00 1,755.00
2018-12-31 3,258.00 7,380.00 1,504.00
2018-09-30 3,546.00 7,404.00 1,589.00
2018-06-30 3,788.00 7,419.00 1,628.00
2018-03-31 4,163.00 7,549.00 1,940.00
2017-12-31 4,589.00 8,328.00 3,094.00
2017-09-30 5,026.00 8,137.00 2,785.00
2017-06-30 4,774.00 8,051.00 2,496.00
2017-03-31 4,498.00 7,876.00 2,493.00
2016-12-31 4,259.00 7,829.00 2,472.00
2016-09-30 4,793.00 7,693.00 2,299.00
2016-06-30 4,950.00 7,164.00 2,355.00
2016-03-31 5,222.00 7,003.00 2,448.00
2015-12-31 5,228.00 7,422.00 3,090.00
2015-09-30 5,090.00 7,812.00 3,001.00
2015-06-30 5,306.00 7,813.00 2,858.00
2015-03-31 4,982.00 7,553.00 2,672.00
2014-12-31 6,824.00 7,419.00 3,990.00
2014-09-30 7,801.00 7,530.00 4,820.00
2014-06-30 8,440.00 7,210.00 5,297.00
2014-03-31 8,580.00 7,622.00 3,547.00
2013-12-31 9,709.00 6,344.00 3,618.00
2013-09-30 10,468.00 5,136.00 3,018.00
2013-06-30 10,231.00 5,072.00 2,768.00
2013-03-31 10,279.00 5,012.00 2,662.00
2012-12-31 10,570.00 5,048.00 2,779.00
2012-09-30 10,262.00 4,996.00 2,054.00
2012-06-30 10,101.00 4,906.00 1,692.00
  • Illinois Tool Works's level of debt (241.9%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (88.8% vs 241.9% today).
  • Debt is well covered by operating cash flow (37.3%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 16.2x coverage).
X
Financial health checks
We assess Illinois Tool Works's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Illinois Tool Works has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

ITW Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.63%
Current annual income from Illinois Tool Works dividends. Estimated to be 2.87% next year.
If you bought $2,000 of Illinois Tool Works shares you are expected to receive $53 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Illinois Tool Works's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).
  • Illinois Tool Works's dividend is below the markets top 25% of dividend payers in United States of America (3.73%).
Upcoming dividend payment

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

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:ITW Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 19 Analyst Estimates (S&P Global) See Below
United States of America Machinery Industry Average Dividend Yield Market Cap Weighted Average of 77 Stocks 2%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2012 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:ITW Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 5.22 1.00
2022-12-31 5.15 3.00
2021-12-31 4.65 9.00
2020-12-31 4.22 13.00
2019-12-31 4.04 13.00
NYSE:ITW Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-05-03 4.000 2.685
2019-02-15 4.000 2.699
2018-11-01 4.000 3.028
2018-08-03 4.000 2.916
2018-05-04 3.120 2.170
2018-02-15 3.120 1.976
2017-10-27 3.120 1.896
2017-08-04 3.120 2.153
2017-05-05 2.600 1.820
2017-02-10 2.600 1.949
2016-10-28 2.600 2.101
2016-08-05 2.600 2.210
2016-05-06 2.200 2.045
2016-02-12 2.200 2.190
2015-10-30 2.200 2.444
2015-08-07 2.200 2.568
2015-05-08 1.940 2.086
2015-02-13 1.940 1.993
2014-10-31 1.940 2.054
2014-08-08 1.940 2.247
2014-05-02 1.680 1.946
2014-02-14 1.680 2.042
2013-11-01 1.680 2.096
2013-08-02 1.680 2.240
2013-05-03 1.520 2.163
2013-02-15 1.520 2.443
2012-10-26 1.520 2.458
2012-08-03 1.520 2.559
2012-05-04 1.440 2.669
2012-02-10 1.440 2.556
2011-10-28 1.440 2.981
2011-08-05 1.440 3.238
2011-05-06 1.360 2.456
2011-02-11 1.360 2.483
2010-10-29 1.360 2.646
2010-08-06 1.360 2.993
2010-05-07 1.240 2.768
2010-02-12 1.240 2.600
2009-10-30 1.240 2.620
2009-08-07 1.240 2.857

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • 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
What portion of Illinois Tool Works's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (2x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.9x coverage).
X
Income/ dividend checks
We assess Illinois Tool Works's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Illinois Tool Works afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Illinois Tool Works has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

ITW Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
E. Santi
COMPENSATION $17,708,516
AGE 56
TENURE AS CEO 6.6 years
CEO Bio

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 as the Chief Operating Officer of Illinois Tool Works Inc., from October 12, 2012 to November 18, 2012. He served as the President of J & B Aviation Services Inc. He joined Illinois Tool Works Inc., in 1983 and also served as its has been an Executive Vice President since 2004 and served various sales, marketing and general management positions with the construction products, machined components and welding businesses during his 22 years with Illinois Tool Works Inc. Mr. Santi has spent his entire career with Illinois Tool Works Inc. where he joined in 1983 as a Sales Representative for Illinois Tool Works Inc.'s Buildex division which manufactures fasteners for the commercial construction market. From 1985 to 1994, Mr. Santi progressed through a series of sales and marketing management assignments at Buildex and at ITW's Paslode division. Since 1995, he served as General Manager of ITW's Vortec division. He served as Vice President and General Manager of ITW's Hobart Ground Power business since 1997 and also served as its Vice President and General Manager for all of the Hobart Brothers businesses since 1998. In 2002, he was promoted to Group Vice President for the Welding Products Group, adding responsibility for ITW's welding businesses in Europe and Asia. He served as President of the Welding Products Focus Markets Group since 2003 and was responsible for a number of welding power source and welding accessory divisions in North America. He served as Executive Vice President of Power Systems & Electronics. He has been Chairman of the Board at Illinois Tool Works Inc., since May 2015. He served as Vice Chairman of Illinois Tool Works Inc. from December 2008 to October 12, 2012. He serves as a Trustee of Rush University Medical Center. He served as Director at Federal Reserve Bank Of Chicago (the “Company”) since January 1, 2016 until January 2018 and serves as Vice Chairman of the Board of the Company since January 1, 2018. He has been an Independent Director of W.W. Grainger, Inc. since April 2010 and Illinois Tool Works Inc. since November 2012. He serves as a Trustee at Manufacturers Alliance for Productivity and Innovation, Inc. Mr. Santi graduated from University of Illinois in 1983 with a B.S. degree in Accounting and received a Masters of Management degree from The Kellogg School of Business, Northwestern University in 1992.

CEO Compensation
  • E.'s compensation has been consistent with company performance over the past year, both up more than 20%.
  • E.'s remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Illinois Tool Works management team in years:

7.6
Average Tenure
54.5
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.
Management Team

E. Santi

TITLE
Chairman & CEO
COMPENSATION
$18M
AGE
56
TENURE
6.6 yrs

Michael Larsen

TITLE
Senior VP & CFO
COMPENSATION
$5M
AGE
49
TENURE
5.8 yrs

Steve Martindale

TITLE
Executive Vice President of Test & Measurement and Electronics Segment
COMPENSATION
$3M
AGE
62
TENURE
10.5 yrs

Naga Nagarajan

TITLE
Executive Vice President of Automotive OEM Segment
COMPENSATION
$3M
AGE
55
TENURE
8.8 yrs

Chris O’Herlihy

TITLE
Vice Chairman
COMPENSATION
$5M
AGE
54
TENURE
8.7 yrs

Randy Scheuneman

TITLE
VP & Chief Accounting Officer
AGE
50
TENURE
9.8 yrs

Karen Fletcher

TITLE
Vice President of Investor Relations
AGE
58
TENURE
1.3 yrs

Norman Finch

TITLE
Senior VP
COMPENSATION
$4M
AGE
53
TENURE
2.3 yrs

Katie Lawler

TITLE
Senior VP & Chief Human Resources Officer
AGE
52
TENURE
4.7 yrs

Juan Valls

TITLE
Executive Vice President of Specialty Products
AGE
56
TENURE
12.4 yrs
Board of Directors Tenure

Average tenure and age of the Illinois Tool Works board of directors in years:

8.1
Average Tenure
60.5
Average Age
  • The tenure for the Illinois Tool Works board of directors is about average.
Board of Directors

E. Santi

TITLE
Chairman & CEO
COMPENSATION
$18M
AGE
56
TENURE
4.1 yrs

Susan Crown

TITLE
Independent Director
COMPENSATION
$285K
AGE
59
TENURE
25.4 yrs

Jim Skinner

TITLE
Lead Director
COMPENSATION
$325K
AGE
74
TENURE
2.1 yrs

Pamela Strobel

TITLE
Independent Director
COMPENSATION
$300K
AGE
66
TENURE
11.3 yrs

David H. Smith

TITLE
Independent Director
COMPENSATION
$295K
AGE
51
TENURE
9.5 yrs

Rick Lenny

TITLE
Independent Director
COMPENSATION
$300K
AGE
66
TENURE
4.8 yrs

Kevin Warren

TITLE
Independent Director
COMPENSATION
$280K
AGE
55
TENURE
8.8 yrs

Anré Williams

TITLE
Independent Director
COMPENSATION
$280K
AGE
52
TENURE
8.8 yrs

Dan Brutto

TITLE
Independent Director
COMPENSATION
$280K
AGE
62
TENURE
7.3 yrs

Jim Griffith

TITLE
Independent Director
COMPENSATION
$280K
AGE
64
TENURE
7.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
31. Jul 18 Buy Richard Lenny Individual 27. Jul 18 27. Jul 18 1,778 $140.85 $250,431
X
Management checks
We assess Illinois Tool Works's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Illinois Tool Works has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

ITW News

Simply Wall St News

Is Illinois Tool Works Inc. (NYSE:ITW) A Smart Choice For Dividend Investors?

(NYSE:ITW) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments. A slim 2.6% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, Illinois Tool Works could have potential. The company also bought back stock equivalent to around 3.7% of market capitalisation this year. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. … Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Illinois Tool Works has grown its earnings per share at 16% per annum over the past five years. Illinois Tool Works's earnings per share have grown rapidly in recent years, although more than half of its profits are being paid out as dividends, which makes us wonder if the company has a limited number of reinvestment opportunities in its business. Conclusion Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. … Earnings growth generally bodes well for the future value of company dividend payments.

Simply Wall St -

What Should We Expect From Illinois Tool Works Inc.'s (NYSE:ITW) Earnings In The Year Ahead?

Looking at Illinois Tool Works Inc.'s (NYSE:ITW) earnings update in March 2019, analyst consensus outlook seem in-line with its track record, as upcoming earnings growth is expected to be 4.3% next year, similar to the range of average earnings growth for the past five years of 4.5% per year. … Below is a brief commentary on the longer term outlook the market has for Illinois Tool Works. … See our latest analysis for Illinois Tool Works What can we expect from Illinois Tool Works in the longer term?

Simply Wall St -

Does Illinois Tool Works Inc. (NYSE:ITW) Have A Good P/E Ratio?

Looking at earnings over the last twelve months, Illinois Tool Works has a P/E ratio of 19.91. … Check out our latest analysis for Illinois Tool Works How Do You Calculate Illinois Tool Works's P/E Ratio? … The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Illinois Tool Works: P/E of 19.91 = $150.5 ÷ $7.56 (Based on the trailing twelve months to March 2019.) Is A High P/E Ratio Good?

Simply Wall St -

How Much Are Illinois Tool Works Inc. (NYSE:ITW) Insiders Spending On Buying Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in Illinois Tool Works Inc. … For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.' Check out our latest analysis for Illinois Tool Works The Last 12 Months Of Insider Transactions At Illinois Tool Works Over the last year, we can see that the biggest insider purchase was by Independent Director Richard Lenny for US$250k worth of shares, at about US$141 per share. … It would be great to see more insider buying, but overall it seems like Illinois Tool Works insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future.

Simply Wall St -

Is Illinois Tool Works Inc. (NYSE:ITW) Potentially Underrated?

In the case of Illinois Tool Works Inc. … For those interested in digger a bit deeper into my commentary, read the full report on Illinois Tool Works here. … NYSE:ITW Historical Dividend Yield, May 27th 2019 Next Steps: For Illinois Tool Works, I've compiled three essential factors you should further research: Future Outlook: What are well-informed industry analysts predicting for ITW’s future growth?

Simply Wall St -

Is Illinois Tool Works Inc. (NYSE:ITW) A High Quality Stock To Own?

The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Illinois Tool Works: 78% = US$2.5b ÷ US$3.2b (Based on the trailing twelve months to March 2019.) Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. … Does Illinois Tool Works Have A Good Return On Equity? … Combining Illinois Tool Works's Debt And Its 78% Return On Equity Illinois Tool Works clearly uses a significant amount of debt to boost returns, as it has a debt to equity ratio of 2.48.

Simply Wall St -

A Close Look At Illinois Tool Works Inc.’s (NYSE:ITW) 31% ROCE

Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Understanding Return On Capital Employed (ROCE). … ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business.

Simply Wall St -

If You Like EPS Growth Then Check Out Illinois Tool Works (NYSE:ITW) Before It's Too Late

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Illinois Tool Works (NYSE:ITW). … Over the last three years, Illinois Tool Works has grown EPS by 13% per year. … It seems Illinois Tool Works is pretty stable, since revenue and EBIT margins are pretty flat year on year.

Simply Wall St -

Are Illinois Tool Works Inc. (NYSE:ITW) Investors Paying Above The Intrinsic Value?

by taking the expected future cash flows and discounting them to their present value. … I will use the Discounted Cash Flow (DCF) model. … We generally believe that a company's value is the present value of all of the cash it will generate in the future.

Simply Wall St -

Is Illinois Tool Works Inc. (NYSE:ITW) Excessively Paying Its CEO?

This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. … has a market cap of US$50b, and is paying total annual CEO compensation of US$18m. … When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m

Simply Wall St -

ITW Company Info

Description

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; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; metal arc welding consumables and related accessories; and metal jacketing and other insulation products for various industrial and commercial applications. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment offers beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM/tiers, commercial food equipment, construction, general industrial, and automotive aftermarket end markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

Details
Name: Illinois Tool Works Inc.
ITW
Exchange: NYSE
Founded: 1912
$49,534,105,627
325,775,111
Website: http://www.itw.com
Address: Illinois Tool Works Inc.
155 Harlem Avenue,
Glenview,
Illinois, 60025,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE ITW Common Stock New York Stock Exchange US USD 30. Jun 1972
DB ILT Common Stock Deutsche Boerse AG DE EUR 30. Jun 1972
LSE 0J8W Common Stock London Stock Exchange GB USD 30. Jun 1972
WBAG ITW Common Stock Wiener Boerse AG AT EUR 30. Jun 1972
BMV ITW * Common Stock Bolsa Mexicana de Valores MX MXN 30. Jun 1972
Number of employees
Current staff
Staff numbers
48,000
Illinois Tool Works employees.
Industry
Industrial Machinery
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/06/24 23:38
End of day share price update: 2019/06/24 00:00
Last estimates confirmation: 2019/06/19
Last earnings filing: 2019/05/03
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.