Stock of the Day

August 13, 2019

Illinois Tool Works (ITW)

$263.79
+$4.57 (+1.8%)
Market Cap: $75.56B

About Illinois Tool Works

Illinois Tool Works Inc. manufactures and sells industrial products and equipment in the United States and internationally. 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, refrigeration, cooking, 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 and sells 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; and metal arc welding consumables and related accessories. 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 provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM and tiers, MRO, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, automotive aftermarket end, and other 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.

Illinois Tool Works Bull Case

Here are some ways that investors could benefit from investing in Illinois Tool Works Inc.:

  • The company recently reported earnings per share (EPS) of $2.58, exceeding analysts' expectations, which indicates strong financial performance and potential for growth.
  • Illinois Tool Works Inc. has a high return on equity of 90.89%, suggesting effective management and a strong ability to generate profits from shareholders' equity.
  • The company has increased its quarterly dividend to $1.61, reflecting a commitment to returning value to shareholders. This translates to an annualized dividend yield of 2.5%, which can be attractive for income-focused investors.
  • With a net margin of 21.31%, Illinois Tool Works Inc. demonstrates efficient cost management and profitability, which can be appealing for long-term investors.
  • The current stock price is around $259, which may present a favorable entry point for investors looking to capitalize on the company's growth potential.

Illinois Tool Works Bear Case

Investors should be bearish about investing in Illinois Tool Works Inc. for these reasons:

  • Despite recent earnings growth, the company has faced downgrades from several analysts, indicating potential concerns about future performance and market conditions.
  • Some analysts have set price targets below the current stock price, suggesting that the stock may be overvalued at its current level.
  • The dividend payout ratio is at 52.59%, which, while sustainable, indicates that a significant portion of earnings is being distributed as dividends, potentially limiting reinvestment in growth opportunities.
  • Market sentiment has been mixed, with a consensus rating of "Hold" from analysts, which may indicate uncertainty about the company's future prospects.
  • With three analysts rating the stock as a sell, there may be underlying concerns about the company's competitive position and market dynamics.
← Previous Stock of the DayNext Stock of the Day →

Recent News