Common Stock Valuation Ratios (Price Multiples)
Quarterly Data
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).
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- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
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Historical Valuation Ratios (Summary)
Illinois Tool Works Inc., historical price multiples (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The analysis of the quarterly financial ratios reveals several notable trends over the observed period.
- Price to Earnings (P/E) Ratio
- The P/E ratio initially decreased from 27.33 at the beginning of 2018 to a low of 18.46 by the end of 2018, indicating a period of declining market valuation relative to earnings. Following this, the ratio experienced fluctuations with an overall increasing trend, peaking at 33.82 in the first quarter of 2021 before gradually declining to 25.29 by the end of 2021. This pattern suggests varying investor sentiment towards earnings performance, with a notable peak in early 2021 and a subsequent normalization.
- Price to Operating Profit (P/OP) Ratio
- This ratio followed a somewhat similar trajectory to the P/E ratio, decreasing slightly during 2018, then increasing steadily and peaking at 24.75 in the first quarter of 2021. After this peak, the ratio showed a decreasing tendency, declining to 19.59 by the last quarter of 2021. The initial increase indicates a rising market valuation relative to operating profit, while the later decline suggests a moderation of investor expectations or improved operating profits relative to price.
- Price to Sales (P/S) Ratio
- The P/S ratio showed a gradual increase over the period with some fluctuations. Starting at 3.38 in early 2018, it rose to a peak of 5.81 in the first quarter of 2021 before declining to 4.71 by the end of 2021. This upward trend through early 2021 reflects increasing market valuation relative to sales, possibly due to improved sales outlook or market optimism, followed by a partial correction.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio demonstrated a consistent upward trend from 11.85 in March 2018 to a peak of 25.21 in June 2020. After this peak, the ratio decreased somewhat but remained elevated compared to earlier periods, ending at 18.79 in December 2021. This pattern indicates a significant increase in market valuation relative to book value over the period, with a peak in mid-2020, followed by some re-adjustment.
Overall, the financial ratios suggest that the company's market valuation relative to earnings, operating profit, sales, and book value generally increased from 2018 through early 2021. The peaks in early to mid-2021 indicate heightened investor optimism or improved financial performance measures during this time frame. Subsequently, several ratios declined slightly towards the end of 2021, implying a stabilization or moderate correction in market valuations.
Price to Earnings (P/E)
Illinois Tool Works Inc., historical P/E calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||
| Net income (in millions) | |||||||||||||||||||||
| Earnings per share (EPS)2 | |||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||
| P/E ratio4 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| P/E Ratio, Competitors5 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
EPS
= (Net incomeQ4 2021
+ Net incomeQ3 2021
+ Net incomeQ2 2021
+ Net incomeQ1 2021)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated fluctuations across the periods analyzed. Starting at $145.47 in March 2018, the price declined to a low of $129.47 in September 2018 before rebounding and reaching a peak of $187.86 in December 2019. In the early part of 2020, the price dipped to $161.01 but then recovered steadily to a high of $237.06 by March 2021. Following this peak, there was a slight downward adjustment, with the price settling near $217.72 at the end of 2021.
- Earnings Per Share (EPS) Trend
- EPS exhibited a generally positive trajectory over the period. Beginning at $5.32 in March 2018, EPS rose significantly to $7.91 by December 2018. It showed stability around this level through 2019, followed by a mild decline to approximately $6.66 in the latter half of 2020. In 2021, EPS recovered and improved further, achieving highs of $8.69 in September before experiencing a minor decrease to $8.61 at the final quarter of 2021.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio displayed variability that inversely correlated with EPS and share price changes at times. It began relatively high at 27.33 in March 2018, decreased to around 18.46 by December 2018 amid rising EPS and declining share price, then climbed back to about 23.76 by the end of 2019. Notably, during 2020, as EPS decreased and the share price initially declined but later rose, the P/E ratio increased markedly to a peak of 30.18 in December 2020. By 2021, the P/E ratio moderated to a range between 25.29 and 33.82, reflecting a balance between increasing earnings and fluctuating share prices.
- Overall Observations
- The analysis indicates a firm with growing earnings over the period, albeit with episodes of volatility primarily in 2018 and 2020. Share prices correspondingly showed substantial recovery and growth after early declines. The P/E ratio fluctuations suggest market reassessments of valuation relative to earnings, particularly during periods of economic uncertainty or changing investor sentiment. The consistent rise in EPS into 2021, coupled with elevated share prices and stabilized P/E ratios, points to improving financial performance and investor confidence in the latter part of the observed timeframe.
Price to Operating Profit (P/OP)
Illinois Tool Works Inc., historical P/OP calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||
| Operating income (in millions) | |||||||||||||||||||||
| Operating profit per share2 | |||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||
| P/OP ratio4 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| P/OP Ratio, Competitors5 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
Operating profit per share
= (Operating incomeQ4 2021
+ Operating incomeQ3 2021
+ Operating incomeQ2 2021
+ Operating incomeQ1 2021)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial metrics over the reported quarters reveals several notable trends in performance and valuation.
- Share Price
- The share price demonstrated fluctuating but generally upward movement from early 2018 through the end of 2021. Initially, it decreased slightly in 2018, reaching a low near the third quarter, then staged a recovery through 2019. Amid market disruptions in early 2020, the price dipped but rebounded strongly, achieving a significant peak in the first quarter of 2021, followed by some volatility and a moderate decline by the close of 2021.
- Operating Profit Per Share (OPPS)
- Operating profit per share showed relative stability with a slight downward trend from 2018 to 2020. The metric dropped most noticeably during 2020, likely reflecting operational challenges. However, a rebound was observed throughout 2021, with OPPS values recovering noticeably by the third quarter and maintaining a robust level towards the year-end.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio exhibits a clear upward trajectory over the analyzed periods, especially evident from late 2018 onwards. Initially stable in 2018, the ratio began climbing in 2019 and surged further during 2020, peaking in the fourth quarter. Although there was some reduction in 2021, the ratio remained elevated compared to earlier periods. This indicates increasing market valuation multiples relative to operating profit per share, suggesting heightened investor expectations or premium pricing despite fluctuations in profitability per share.
In summary, the company's share price growth outpaced gains in operating profit per share, resulting in expanding valuation multiples. The notable dip in operating profitability during 2020 likely reflects adverse external impacts, while the subsequent profit recovery corresponds with the stabilization of share prices. The elevated and fluctuating P/OP ratio in 2020 and 2021 points to increased market optimism or risk perception influencing investor valuation. Overall, the data illustrates a dynamic performance cycle with market valuation rising faster than underlying profit metrics in the recent periods.
Price to Sales (P/S)
Illinois Tool Works Inc., historical P/S calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||
| Operating revenue (in millions) | |||||||||||||||||||||
| Sales per share2 | |||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||
| P/S ratio4 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| P/S Ratio, Competitors5 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
Sales per share
= (Operating revenueQ4 2021
+ Operating revenueQ3 2021
+ Operating revenueQ2 2021
+ Operating revenueQ1 2021)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends affecting valuation metrics and performance indicators over the examined periods.
- Share Price
- The share price exhibited variability with an upward trend overall. From early 2018 to the end of 2019, the price generally increased, rising from approximately $145.47 to about $187.86. There was a decline at the beginning of 2020, correlating with broader market conditions, dropping to near $161.01. Subsequently, the price recovered, peaking in the first quarter of 2021 at $237.06, before experiencing moderate fluctuations and settling around $217.72 by the end of 2021.
- Sales Per Share
- Sales per share displayed a relatively stable pattern with minor fluctuations. Between March 2018 and December 2019, sales per share hovered around the mid-40s in US dollars, with a slight dip towards the end of 2019 and early 2020 down to approximately $39.71. Recovery was observed thereafter, with a consistent increase throughout 2021, reaching a high of $46.19 by the last quarter analyzed. This indicates a gradual improvement in sales performance per share after a period of stagnation and decline during the early phases of the COVID-19 pandemic.
- Price-to-Sales (P/S) Ratio
- The P/S ratio notable shows a rising trend until 2021, reflecting increasing market valuation relative to sales. Starting from about 3.38 in early 2018, the ratio climbed to over 4.25 by the end of 2019. Despite the sales decline, the price-to-sales ratio increased significantly, reaching a peak around 5.81 in the first quarter of 2021, indicating that the market price appreciated more rapidly than sales per share. Following this peak, the ratio slightly declined, stabilizing near 4.71 by the end of 2021. This suggests a recalibration or moderation of market expectations in relation to sales performance.
In summary, the share price generally increased over the period, reflecting positive investor sentiment, despite volatility linked to external market disruptions. Sales per share remained stable with a temporary decline during early 2020, followed by a recovery trend. The rising price-to-sales ratio until early 2021 points to an enhanced market valuation relative to revenue generation, though it displayed some moderation towards the end of the period, indicating possibly more cautious investor outlook after a significant valuation expansion.
Price to Book Value (P/BV)
Illinois Tool Works Inc., historical P/BV calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||
| Stockholders’ equity attributable to ITW (in millions) | |||||||||||||||||||||
| Book value per share (BVPS)2 | |||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||
| P/BV ratio4 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| P/BV Ratio, Competitors5 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
BVPS = Stockholders’ equity attributable to ITW ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a general upward trend from March 2018 through December 2021, starting at $145.47 and rising to $217.72. Notable fluctuations occurred, with declines between March 2018 and September 2018, followed by consistent increases through December 2019, peaking at $187.86. A sharp drop was observed in the first quarter of 2020 to $161.01, likely reflecting market volatility during that period, but prices recovered quickly, reaching a high of $237.06 in March 2021 before experiencing minor declines towards the end of 2021.
- Book Value per Share (BVPS)
- BVPS demonstrated a declining trend through 2018 and 2019, decreasing from $12.28 in March 2018 to a low of $7.23 by March 2020. This decline reversed afterwards, with steady growth through 2021, reaching $11.58 by the last quarter of 2021. The initial fall suggests possible asset write-downs or increased liabilities, while the recovery indicates strengthening financial fundamentals or asset base improvements in the latter period.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio showed an increasing trend overall, beginning at 11.85 in March 2018 and peaking significantly above 25 in June 2020. This increase reflects the share price rising faster than the book value per share, indicating heightened investor optimism or market valuation relative to the company’s net asset value. After the peak in mid-2020, the ratio declined somewhat but remained elevated above 18 throughout 2021, suggesting sustained premium valuation levels despite partial normalization.
- Summary of Trends and Insights
- The data reveals an initial decline in fundamental asset value per share through early 2020, coinciding with market disruptions, followed by a recovery period highlighted by rising book value and a generally appreciating share price. The elevated and volatile P/BV ratio underscores periods of increased investor confidence, notably post-2020 market recovery. The divergence between the faster-growing share price and slower recovering book value suggests that market expectations might focus on future prospects rather than current net asset metrics alone.