Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Illinois Tool Works Inc. (NYSE:ITW)

Common Stock Valuation Ratios (Price Multiples)

Beginner level

Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).


Current Valuation Ratios

Illinois Tool Works Inc., current price multiples

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Illinois Tool Works Inc. Caterpillar Inc. Industrial Engineering Industrials
Selected Financial Data
Current share price (P) $211.10
No. shares of common stock outstanding 316,520,261
Growth rate (g) 28.52%
 
Earnings per share (EPS) $7.96
Next year expected EPS $10.24
Operating profit per share $10.75
Sales per share $44.58
Book value per share (BVPS) $9.56
Valuation Ratios (Price Multiples)
Price to earnings (P/E) 26.50 15.57 18.77 30.74
Price to next year expected earnings 20.62 15.56 17.72 28.13
Price-earnings-growth (PEG) 0.93 159.95 3.18 3.31
Price to operating profit (P/OP) 19.64 11.44 13.83 17.10
Price to sales (P/S) 4.74 1.87 2.49 2.26
Price to book value (P/BV) 22.08 6.50 9.18 7.74

Based on: 10-K (filing date: 2020-02-14).

If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.


Historical Valuation Ratios (Summary)

Illinois Tool Works Inc., historical price multiples

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Price to earnings (P/E) 23.76 18.46 33.07 21.80 17.60
Price to operating profit (P/OP) 17.61 13.20 15.97 14.48 11.66
Price to sales (P/S) 4.25 3.20 3.90 3.26 2.49
Price to book value (P/BV) 19.80 14.54 12.17 10.43 6.40

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

Valuation ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Illinois Tool Works Inc.’s P/E ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Illinois Tool Works Inc.’s P/OP ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Illinois Tool Works Inc.’s P/S ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. Illinois Tool Works Inc.’s P/BV ratio increased from 2017 to 2018 and from 2018 to 2019.

Price to Earnings (P/E)

Illinois Tool Works Inc., historical P/E calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
No. shares of common stock outstanding1 318,864,237 328,108,383 341,545,719 346,550,685 363,766,897
Selected Financial Data (US$)
Net income (in millions) 2,521  2,563  1,687  2,035  1,899 
Earnings per share (EPS)2 7.91 7.81 4.94 5.87 5.22
Share price1, 3 187.86 144.21 163.36 128.00 91.88
Valuation Ratio
P/E ratio4 23.76 18.46 33.07 21.80 17.60
Benchmarks
P/E Ratio, Competitors5
Caterpillar Inc. 12.36 12.42 126.80 18.07
P/E Ratio, Sector
Industrial Engineering 15.69 14.20 62.03 52.05 17.84
P/E Ratio, Industry
Industrials 29.20 28.34 26.14 22.94 24.42

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 Data adjusted for splits and stock dividends.

2 2019 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 2,521,000,000 ÷ 318,864,237 = 7.91

3 Closing price as at the filing date of Illinois Tool Works Inc.’s Annual Report.

4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 187.86 ÷ 7.91 = 23.76

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Illinois Tool Works Inc.’s P/E ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Price to Operating Profit (P/OP)

Illinois Tool Works Inc., historical P/OP calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
No. shares of common stock outstanding1 318,864,237 328,108,383 341,545,719 346,550,685 363,766,897
Selected Financial Data (US$)
Operating income (in millions) 3,402  3,584  3,494  3,064  2,867 
Operating profit per share2 10.67 10.92 10.23 8.84 7.88
Share price1, 3 187.86 144.21 163.36 128.00 91.88
Valuation Ratio
P/OP ratio4 17.61 13.20 15.97 14.48 11.66
Benchmarks
P/OP Ratio, Competitors5
Caterpillar Inc. 9.08 9.20 21.70 116.61 11.66
P/OP Ratio, Sector
Industrial Engineering 11.56 10.41 19.16 28.76 11.66
P/OP Ratio, Industry
Industrials 16.25 13.65 15.18 15.32 12.52

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 Data adjusted for splits and stock dividends.

2 2019 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 3,402,000,000 ÷ 318,864,237 = 10.67

3 Closing price as at the filing date of Illinois Tool Works Inc.’s Annual Report.

4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 187.86 ÷ 10.67 = 17.61

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Illinois Tool Works Inc.’s P/OP ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Price to Sales (P/S)

Illinois Tool Works Inc., historical P/S calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
No. shares of common stock outstanding1 318,864,237 328,108,383 341,545,719 346,550,685 363,766,897
Selected Financial Data (US$)
Operating revenue (in millions) 14,109  14,768  14,314  13,599  13,405 
Sales per share2 44.25 45.01 41.91 39.24 36.85
Share price1, 3 187.86 144.21 163.36 128.00 91.88
Valuation Ratio
P/S ratio4 4.25 3.20 3.90 3.26 2.49
Benchmarks
P/S Ratio, Competitors5
Caterpillar Inc. 1.48 1.47 2.24 1.62 0.86
P/S Ratio, Sector
Industrial Engineering 2.08 1.86 2.66 2.07 1.24
P/S Ratio, Industry
Industrials 2.15 1.93 2.11 1.98 1.71

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 Data adjusted for splits and stock dividends.

2 2019 Calculation
Sales per share = Operating revenue ÷ No. shares of common stock outstanding
= 14,109,000,000 ÷ 318,864,237 = 44.25

3 Closing price as at the filing date of Illinois Tool Works Inc.’s Annual Report.

4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 187.86 ÷ 44.25 = 4.25

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Illinois Tool Works Inc.’s P/S ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Price to Book Value (P/BV)

Illinois Tool Works Inc., historical P/BV calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
No. shares of common stock outstanding1 318,864,237 328,108,383 341,545,719 346,550,685 363,766,897
Selected Financial Data (US$)
Stockholders’ equity attributable to ITW (in millions) 3,026  3,254  4,585  4,254  5,224 
Book value per share (BVPS)2 9.49 9.92 13.42 12.28 14.36
Share price1, 3 187.86 144.21 163.36 128.00 91.88
Valuation Ratio
P/BV ratio4 19.80 14.54 12.17 10.43 6.40
Benchmarks
P/BV Ratio, Competitors5
Caterpillar Inc. 5.16 5.44 6.98 4.42 2.56
P/BV Ratio, Sector
Industrial Engineering 7.67 7.15 8.28 5.89 3.56
P/BV Ratio, Industry
Industrials 7.35 6.80 6.24 5.70 4.29

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 Data adjusted for splits and stock dividends.

2 2019 Calculation
BVPS = Stockholders’ equity attributable to ITW ÷ No. shares of common stock outstanding
= 3,026,000,000 ÷ 318,864,237 = 9.49

3 Closing price as at the filing date of Illinois Tool Works Inc.’s Annual Report.

4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 187.86 ÷ 9.49 = 19.80

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. Illinois Tool Works Inc.’s P/BV ratio increased from 2017 to 2018 and from 2018 to 2019.