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Illinois Tool Works Inc
🇺🇸 ITW · NYSE/NASDAQ · US4523081093
Industrials
USD 289.05 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
26.4
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: 289.05 ÷ 11.03 = 26.4
TTM period through: 2026-06-30
Forward P/E (estimated): 25.6
Based on analyst estimates
Reference: Provider P/E (Trailing): 26.5
Net Debt/EBITDA (TTM)
1.9x
Latest quarter: 7.6x
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: 2026-06-30
Latest quarter (2026-06-30): 7.6x
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
1.0%
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
19.2x
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)
2.44%
TTM: 2.20%
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): 2.44%
Trailing Yield (TTM, last 12 months): 2.20%
Payout Ratio (Fwd)
62.4%
TTM: 57.4%
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): 62.4%
Payout (TTM): 57.4%
Cash Flow Payout (TTM): 55.0%
FCF Coverage (TTM): 1.59x
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 |
| Declared | Quarterly | 07 Aug 2026 | 30 Sep 2026 | 09 Oct 2026 | USD | 1.72 |
| Paid | 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 diversified industrial compounder with a wide economic moat, pristine margins, and a proven track record of returning capital to shareholders. However, at over 26x earnings and a low 2.2% yield, the stock is currently priced for perfection. Existing holders should maintain their positions, but new buyers should wait for a broader market pullback to improve the entry point.
Sector Context
Illinois Tool Works operates in the Specialty Industrial Machinery sector. It leverages a decentralized operating model (the 'ITW Way') to dominate niche markets. For DGI investors, highly engineered industrial components provide wide moats and steady cash flows, though they can carry some cyclicality.
📊 Strategy Analysis
- • Outstanding profitability with EBIT margins of 25.8% and EBITDA margins of 28.1%.
- • Strong dividend safety supported by a reasonable 58.4% payout ratio and free cash flow covering the dividend 1.59x.
- • Shareholder-friendly capital allocation, highlighted by an announced dividend increase and a new $6 billion share repurchase program (driving total shareholder yield to 4.45%).
- • Solid balance sheet with a Net Debt/EBITDA ratio of 1.91x, providing ample flexibility for continued dividend growth.
⚠ What to Watch
- • Premium valuation with a trailing P/E of 26.37x, which sits far outside the optimal DGI target range of 8-15x.
- • The current dividend yield of 2.20% is relatively low for strict income-focused portfolios.
- • Trading near $290, the stock price significantly exceeds the calculated monopoly fair value upper bound of $198.59, offering no margin of safety.
📊 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: 2026-08-15
Disclaimer: This information is for educational purposes only. Not financial advice.