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Illinois Tool Works Inc
🇺🇸 ITW · NYSE/NASDAQ · US4523081093
Industrials
USD 270.87 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
25.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 270.87 ÷ 10.77 = 25.1
TTM period through: 2026-03-31
Forward P/E (estimated): 23.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 25.3
Net Debt/EBITDA (TTM)
1.8x
Latest quarter: 7.9x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 7.9x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
ROE
96.9%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
18.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Dividend Summary
Powered by EODHDDividend Yield (Fwd)
2.38%
TTM: 2.35%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Forward Yield (estimated): 2.38%
Trailing Yield (TTM, last 12 months): 2.35%
Payout Ratio (Fwd)
59.8%
TTM: 57.7%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (Fwd): 59.8%
Payout (TTM): 57.7%
Cash Flow Payout (TTM): 57.3%
FCF Coverage (TTM): 1.51x
Growth Streak
8 yrs
Consec. increases
Div. Growth (5Y)
7.1%
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 30 Jun 2027 | — | USD | 1.61 |
| Forecast* | Quarterly | — | 31 Mar 2027 | — | USD | 1.61 |
| Forecast* | Quarterly | — | 31 Dec 2026 | — | USD | 1.61 |
| Forecast* | Quarterly | — | 30 Sep 2026 | — | USD | 1.61 |
| Declared | Quarterly | 08 May 2026 | 30 Jun 2026 | 10 Jul 2026 | USD | 1.61 |
| Paid | Quarterly | 13 Feb 2026 | 31 Mar 2026 | 09 Apr 2026 | USD | 1.61 |
| Paid | Quarterly | 29 Oct 2025 | 31 Dec 2025 | 09 Jan 2026 | USD | 1.61 |
| Paid | Quarterly | 01 Aug 2025 | 30 Sep 2025 | 10 Oct 2025 | USD | 1.61 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
Illinois Tool Works is an elite industrial compounder with an exceptional 50-year dividend growth history and outstanding profitability metrics. Existing shareholders should maintain positions given the highly secure dividend and pristine capital efficiency. However, new investors should wait for a better entry point, as the current valuation offers limited upside and the yield falls below our target threshold.
Sector Context
Illinois Tool Works is a highly diversified industrial manufacturer producing specialized equipment, consumables, and related services across automotive, food equipment, and testing segments. While not a traditional utility, its highly engineered components, regulatory tailwinds, and deeply entrenched B2B relationships create a wide economic moat that supports predictable cash flows suitable for conservative dividend portfolios.
📊 Strategy Analysis
- • Exceptional profitability profile featuring a remarkable 96.85% ROE and strong 28.68% EBITDA margins.
- • Pristine balance sheet with Net Debt/EBITDA of 1.79x, comfortably below the 3x threshold and providing significant financial flexibility.
- • Flawless dividend track record spanning over 50 years, supported by a safe 59.8% payout ratio and strong free cash flow coverage of 1.51x.
- • Significant structural competitive advantages driven by regulatory tailwinds in automotive lightweighting and environmental phase-outs, which favor ITW's highly engineered solutions.
⚠ What to Watch
- • Current P/E of 25.15x significantly exceeds the strategy's target range of 8-15x, reflecting a steep premium valuation.
- • The trailing dividend yield of 2.35% falls short of the 3% minimum threshold typically required for initiating new income-focused positions.
- • Trading at $270.87, the share price substantially exceeds the calculated monopoly fair value upper bound estimate of $193.88.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-07-04
Disclaimer: This information is for educational purposes only. Not financial advice.