In our view, Illinois Tool Works is a consultative manufacturing firm that invents long-term solutions for its customers’ most painful problems. It explicitly operates in markets where it can differentiate itself and where customers prioritize product performance over price.
ITW’s long-term incentive plan is based partially on the company’s return on invested capital, a metric we think encourages management to grow the business responsibly and efficiently.
ITW’s growth profile has not meaningfully improved from a decade ago, a period during which ITW’s organic top line grew below GDP.
|
Metric
|
ITW
|
MMM
|
TT
|
|---|---|---|---|
Price/Earnings (Normalized) | 25.37 | 20.41 | 34.46 |
Price/Book Value | 27.24 | 21.84 | 12.09 |
Price/Sales | 4.87 | 3.66 | 4.74 |
Price/Cash Flow | 21.61 | 15.60 | 28.91 |
|
Metric
|
ITW
|
MMM
|
TT
|
|---|---|---|---|
Quick Ratio | 0.74 | 0.78 | 0.66 |
Current Ratio | 1.11 | 1.41 | 1.07 |
Interest Coverage | 14.51 | 5.96 | 17.91 |
|
Metric
|
ITW
|
MMM
|
TT
|
|---|---|---|---|
Return on Assets (Normalized) | 20.05% | 12.76% | 13.82% |
Return on Equity (Normalized) | 103.14% | 120.12% | 36.40% |
Return on Invested Capital (Normalized) | 28.00% | 30.37% | 24.72% |
|
1-Day Chart
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United States