Price to Book Value (P/BV)
since 2005
Calculation
Illinois Tool Works Inc., P/BV, long-term trends, calculation
| P/BV | = | Share price1, 2, 3 | ÷ | Book value per share1 (BVPS) | BVPS1 | = | Stockholders’ equity attributable to ITW1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 11, 2022 | 18.79 | = | 217.72 | ÷ | 11.58 | 11.58 | = | 3,625 | ÷ | 312,926,939 | |
| Feb 12, 2021 | 20.01 | = | 200.98 | ÷ | 10.05 | 10.05 | = | 3,181 | ÷ | 316,662,263 | |
| Feb 14, 2020 | 19.80 | = | 187.86 | ÷ | 9.49 | 9.49 | = | 3,026 | ÷ | 318,864,237 | |
| Feb 15, 2019 | 14.54 | = | 144.21 | ÷ | 9.92 | 9.92 | = | 3,254 | ÷ | 328,108,383 | |
| Feb 15, 2018 | 12.17 | = | 163.36 | ÷ | 13.42 | 13.42 | = | 4,585 | ÷ | 341,545,719 | |
| Feb 10, 2017 | 10.43 | = | 128.00 | ÷ | 12.28 | 12.28 | = | 4,254 | ÷ | 346,550,685 | |
| Feb 12, 2016 | 6.40 | = | 91.88 | ÷ | 14.36 | 14.36 | = | 5,224 | ÷ | 363,766,897 | |
| Feb 13, 2015 | 5.47 | = | 98.26 | ÷ | 17.97 | 17.97 | = | 6,819 | ÷ | 379,447,026 | |
| Feb 14, 2014 | 3.44 | = | 78.59 | ÷ | 22.84 | 22.84 | = | 9,703 | ÷ | 424,867,793 | |
| Feb 19, 2013 | 2.74 | = | 64.19 | ÷ | 23.39 | 23.39 | = | 10,561 | ÷ | 451,435,783 | |
| Feb 17, 2012 | 2.71 | = | 56.19 | ÷ | 20.71 | 20.71 | = | 10,018 | ÷ | 483,773,784 | |
| Feb 28, 2011 | 2.88 | = | 54.10 | ÷ | 18.80 | 18.80 | = | 9,370 | ÷ | 498,419,391 | |
| Feb 26, 2010 | 2.60 | = | 45.52 | ÷ | 17.53 | 17.53 | = | 8,808 | ÷ | 502,408,086 | |
| Feb 27, 2009 | 1.81 | = | 27.80 | ÷ | 15.35 | 15.35 | = | 7,663 | ÷ | 499,164,971 | |
| Feb 28, 2008 | 2.81 | = | 49.95 | ÷ | 17.75 | 17.75 | = | 9,351 | ÷ | 526,912,512 | |
| Feb 26, 2007 | 3.26 | = | 52.60 | ÷ | 16.14 | 16.14 | = | 9,018 | ÷ | 558,822,857 | |
| Feb 24, 2006 | 3.22 | = | 43.29 | ÷ | 13.43 | 13.43 | = | 7,547 | ÷ | 561,837,734 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
The analysis of the price-to-book value (P/BV) ratio reveals a significant shift in valuation dynamics over the period from 2006 to 2022. The ratio transitioned from a relatively stable, low-multiple range into a phase of aggressive expansion, resulting in a valuation that is substantially higher relative to book value by the end of the period.
- Phase of Relative Stability (2006–2013)
- During this interval, the P/BV ratio remained consistently low, fluctuating between a minimum of 1.81 in 2009 and a maximum of 3.44 in 2014. Share prices and book value per share (BVPS) generally moved in tandem; as BVPS grew from 13.43 to 23.39, the market valuation adjusted proportionally, maintaining a tight correlation between accounting value and market price.
- Rapid Valuation Expansion (2014–2017)
- A distinct inflection point occurred after 2014, where the P/BV ratio began to accelerate rapidly. The ratio climbed from 3.44 in 2014 to 10.43 by 2017. This expansion was driven by a divergence in the underlying components: while the share price continued its upward trajectory, the BVPS began a steady decline, falling from 22.84 in 2014 to 12.28 in 2017.
- Extreme Multiple Growth (2018–2022)
- The final period is characterized by an exponential increase in the P/BV ratio, peaking at 20.01 in 2021 before settling slightly at 18.79 in 2022. This represents a nearly six-fold increase in the multiple compared to the 2006–2013 average. This trend was sustained by share prices reaching historic highs—peaking at 217.72 in 2022—while the BVPS remained suppressed at levels lower than those recorded in 2006.
- Analysis of Component Divergence
- The overall trend is defined by a stark inverse relationship between market price and book value. Between 2006 and 2022, the share price increased by approximately 400%, whereas the BVPS decreased from 13.43 to 11.58. The resulting contraction of the book value denominator, coupled with the expansion of the share price numerator, has led to a highly elevated P/BV ratio, suggesting that the market is valuing the entity based on factors far beyond its net accounting assets.
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Comparison to Competitors
Illinois Tool Works Inc., P/BV, long-term trends, comparison to competitors
| Illinois Tool Works Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 11, 2022 | 18.79 | — | 6.62 | 3.63 | 2.64 | 6.91 | 9.62 | 1.95 |
| Feb 12, 2021 | 20.01 | — | 7.20 | 3.54 | 2.89 | 8.07 | 15.27 | 1.53 |
| Feb 14, 2020 | 19.80 | — | 5.16 | 2.48 | 3.66 | 6.97 | 39.60 | 3.24 |
| Feb 15, 2019 | 14.54 | 674.83 | 5.44 | 2.12 | 3.00 | 5.96 | 61.11 | 2.71 |
| Feb 15, 2018 | 12.17 | 569.92 | 6.98 | 2.06 | 1.96 | 6.44 | — | 3.38 |
| Feb 10, 2017 | 10.43 | 122.80 | 4.42 | 2.19 | 3.47 | 4.79 | 49.61 | 3.22 |
| Feb 12, 2016 | 6.40 | 12.17 | 2.56 | 1.72 | 2.79 | 4.35 | 21.37 | 2.59 |
| Feb 13, 2015 | 5.47 | 12.04 | 3.09 | 2.13 | 2.04 | 4.63 | 17.92 | 3.49 |
| Feb 14, 2014 | 3.44 | 6.50 | 2.96 | 2.15 | 1.96 | 4.25 | 10.65 | 3.14 |
| Feb 19, 2013 | 2.74 | 9.78 | 3.57 | 1.94 | 1.95 | 4.24 | 727.88 | 3.18 |
| Feb 17, 2012 | 2.71 | 16.10 | 5.78 | 2.32 | 1.75 | 4.31 | 28.67 | 3.48 |
| Feb 28, 2011 | 2.88 | 19.33 | 6.02 | 2.47 | 1.86 | 4.26 | 7.56 | 3.65 |
| Feb 26, 2010 | 2.60 | 20.59 | 4.16 | 1.67 | 1.47 | 3.27 | 7.00 | 3.12 |
| Feb 27, 2009 | 1.81 | — | 2.63 | 0.95 | 1.10 | 3.38 | 9.51 | 2.82 |
| Feb 28, 2008 | 2.81 | 7.24 | 5.00 | 2.28 | 2.97 | 4.52 | 4.38 | 3.28 |
| Feb 26, 2007 | 3.26 | 15.15 | 6.33 | 2.88 | 3.17 | 3.94 | 6.23 | 3.92 |
| Feb 24, 2006 | 3.22 | 5.26 | 5.81 | 2.73 | 3.15 | 3.05 | 4.05 | 3.39 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Illinois Tool Works Inc., P/BV, long-term trends, comparison to sector (capital goods)
| Illinois Tool Works Inc. | Capital Goods | |
|---|---|---|
| Feb 11, 2022 | 18.79 | 4.77 |
| Feb 12, 2021 | 20.01 | 5.05 |
| Feb 14, 2020 | 19.80 | 6.91 |
| Feb 15, 2019 | 14.54 | 6.11 |
| Feb 15, 2018 | 12.17 | 5.42 |
| Feb 10, 2017 | 10.43 | 4.64 |
| Feb 12, 2016 | 6.40 | 3.45 |
| Feb 13, 2015 | 5.47 | 3.17 |
| Feb 14, 2014 | 3.44 | 2.85 |
| Feb 19, 2013 | 2.74 | 2.77 |
| Feb 17, 2012 | 2.71 | 2.89 |
| Feb 28, 2011 | 2.88 | 2.90 |
| Feb 26, 2010 | 2.60 | 2.29 |
| Feb 27, 2009 | 1.81 | 1.86 |
| Feb 28, 2008 | 2.81 | 3.46 |
| Feb 26, 2007 | 3.26 | 3.91 |
| Feb 24, 2006 | 3.22 | 3.47 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Illinois Tool Works Inc., P/BV, long-term trends, comparison to industry (industrials)
| Illinois Tool Works Inc. | Industrials | |
|---|---|---|
| Feb 11, 2022 | 18.79 | 5.44 |
| Feb 12, 2021 | 20.01 | 5.89 |
| Feb 14, 2020 | 19.80 | 6.28 |
| Feb 15, 2019 | 14.54 | 5.96 |
| Feb 15, 2018 | 12.17 | 5.37 |
| Feb 10, 2017 | 10.43 | 4.89 |
| Feb 12, 2016 | 6.40 | 3.68 |
| Feb 13, 2015 | 5.47 | 3.70 |
| Feb 14, 2014 | 3.44 | 3.14 |
| Feb 19, 2013 | 2.74 | 3.06 |
| Feb 17, 2012 | 2.71 | 3.09 |
| Feb 28, 2011 | 2.88 | 3.05 |
| Feb 26, 2010 | 2.60 | 2.43 |
| Feb 27, 2009 | 1.81 | 2.01 |
| Feb 28, 2008 | 2.81 | 3.45 |
| Feb 26, 2007 | 3.26 | 3.75 |
| Feb 24, 2006 | 3.22 | 3.95 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).