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Illinois Tool Works Inc
🇺🇸 ITW · NYSE/NASDAQ
Industrials
Price at analysis: USD 279.98 Current price: USD 290.05 * updated every night
Scores
Key Metrics
Powered by EODHDP/E (TTM)
25.0
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.
Net Debt/EBITDA (TTM)
1.8x
Latest quarter: 7.0x
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.
Latest quarter (2026-09-30): 7.0x
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
17.7x
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)
2.34%
TTM: 2.37%
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): 2.34%
Trailing Yield (TTM, last 12 months): 2.37%
Payout Ratio (Fwd)
58.4% TTM
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)
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 30 Sep 2027 | — | USD | 1.72 |
| Forecast* | Quarterly | — | 30 Jun 2027 | — | USD | 1.61 |
| Forecast* | Quarterly | — | 31 Mar 2027 | — | USD | 1.61 |
| Forecast* | Quarterly | — | 31 Dec 2026 | — | USD | 1.61 |
| Paid | 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 |
* 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 robust competitive advantages, pristine margins, and a balanced capital return strategy. Prior concerns regarding short-term earnings declines have fully resolved; however, trading near 25x earnings, the stock currently offers no margin of safety for new capital. Existing holders should maintain their positions, while prospective buyers should keep this on a watchlist for a more attractive valuation entry point.
Sector Context
Illinois Tool Works is a highly diversified industrial manufacturer producing specialized equipment, automotive parts, and polymers. While technically a non-essential Industrials business (incurring a minor strategy-fit penalty), its decentralized structure, massive scale, and sticky supply chain integration create robust moats that reliably support its cash generation and dividend strategy.
📊 Strategy Analysis
- • Elite dividend compounder with a recently announced 7% dividend raise, extending its streak to 63 consecutive years.
- • Robust capital return strategy yielding 4.25% in total shareholder return (2.37% dividend + 1.88% net buybacks).
- • Highly profitable operations generating a 28.91% EBITDA margin, with free cash flow covering the dividend by a healthy 1.52x.
- • Prior concerns regarding declining short-term earnings have been resolved, as recent 8-quarter trajectories confirm renewed top and bottom-line growth.
⚠ What to Watch
- • Premium valuation with a TTM P/E of 24.96x, offering zero margin of safety and trading well above the DGI target range of 8-15x.
- • Current share price of $279.98 remains substantially above the calculated monopoly fair value upper bound of $201.88.
- • The Automotive OEM segment faces structural obsolescence risks from the ICE-to-EV transition, necessitating ongoing R&D investments to offset legacy volume declines.
📊 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: 2026-10-31
Disclaimer: This information is for educational purposes only. Not financial advice.