Latest Ratios: P/E Ratio 25.8x · EV/EBITDA 18.7x · ROE 93.7%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $78.1B | $72.0B | $75.5B | $79.5B | $68.4B | $78.1B | $64.9B | $58.5B | $42.7B | $57.9B | $43.7B |
| Enterprise Value | $86.2B | $80.1B | $82.6B | $86.8B | $75.7B | $84.4B | $70.6B | $64.4B | $48.6B | $63.1B | $49.1B |
| P/E Ratio → | 25.84 | 23.48 | 21.65 | 26.89 | 22.55 | 29.00 | 30.75 | 23.21 | 16.67 | 34.33 | 21.48 |
| P/S Ratio | 4.87 | 4.49 | 4.75 | 4.94 | 4.30 | 5.40 | 5.16 | 4.15 | 2.89 | 4.04 | 3.22 |
| P/B Ratio | 24.56 | 22.32 | 22.76 | 26.39 | 22.16 | 21.54 | 20.39 | 19.30 | 13.11 | 12.61 | 10.27 |
| P/FCF | 28.86 | 26.60 | 26.55 | 25.79 | 35.35 | 34.54 | 25.24 | 21.91 | 17.45 | 27.49 | 21.55 |
| P/OCF | 24.99 | 23.03 | 23.01 | 22.47 | 29.15 | 30.54 | 23.12 | 19.53 | 15.19 | 24.09 | 19.00 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 4.99 | 5.20 | 5.39 | 4.75 | 5.84 | 5.62 | 4.57 | 3.29 | 4.41 | 3.61 |
| EV / EBITDA | 18.72 | 17.39 | 17.71 | 19.58 | 18.02 | 21.72 | 21.35 | 16.83 | 12.01 | 15.95 | 13.89 |
| EV / EBIT | 20.46 | 18.81 | 17.56 | 21.24 | 18.71 | 23.93 | 24.28 | 18.37 | 13.31 | 17.87 | 15.61 |
| EV / FCF | — | 29.59 | 29.06 | 28.15 | 39.10 | 37.35 | 27.48 | 24.15 | 19.85 | 29.98 | 24.19 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 44.1% | 44.1% | 43.6% | 41.5% | 40.0% | 40.4% | 40.1% | 40.8% | 40.5% | 40.5% | 40.3% |
| Operating Margin | 26.3% | 26.3% | 26.8% | 25.1% | 23.8% | 24.1% | 22.9% | 24.1% | 24.3% | 24.4% | 22.5% |
| Net Profit Margin | 19.1% | 19.1% | 21.9% | 18.4% | 19.0% | 18.6% | 16.8% | 17.9% | 17.4% | 11.8% | 15.0% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 93.7% | 93.7% | 110.2% | 96.9% | 90.4% | 79.1% | 67.9% | 80.2% | 65.3% | 38.1% | 42.9% |
| ROA | 19.6% | 19.6% | 22.8% | 19.1% | 19.3% | 17.0% | 13.7% | 16.8% | 16.2% | 10.5% | 13.2% |
| ROIC | 29.0% | 29.0% | 30.8% | 29.3% | 28.0% | 27.6% | 24.1% | 28.2% | 28.4% | 27.0% | 24.0% |
| ROCE | 38.7% | 38.7% | 39.5% | 37.1% | 32.2% | 27.1% | 22.2% | 28.1% | 28.6% | 26.7% | 23.8% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 2.78 | 2.78 | 2.44 | 2.78 | 2.57 | 2.17 | 2.61 | 2.62 | 2.27 | 1.81 | 1.84 |
| Debt / EBITDA | 1.95 | 1.95 | 1.73 | 1.89 | 1.89 | 2.03 | 2.51 | 2.07 | 1.82 | 2.11 | 2.22 |
| Net Debt / Equity | — | 2.52 | 2.15 | 2.42 | 2.34 | 1.75 | 1.81 | 1.97 | 1.80 | 1.14 | 1.26 |
| Net Debt / EBITDA | 1.76 | 1.76 | 1.53 | 1.65 | 1.72 | 1.63 | 1.74 | 1.56 | 1.45 | 1.32 | 1.52 |
| Debt / FCF | — | 3.00 | 2.51 | 2.37 | 3.74 | 2.81 | 2.23 | 2.23 | 2.40 | 2.49 | 2.64 |
| Interest Coverage | 14.58 | 14.58 | 16.63 | 15.37 | 19.93 | 17.47 | 14.13 | 15.88 | 14.21 | 13.58 | 13.27 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.21 | 1.21 | 1.36 | 1.33 | 1.41 | 1.84 | 2.52 | 2.90 | 1.63 | 2.38 | 2.22 |
| Quick Ratio | 0.89 | 0.89 | 0.99 | 0.97 | 0.95 | 1.35 | 2.06 | 2.36 | 1.26 | 1.98 | 1.83 |
| Cash Ratio | 0.17 | 0.17 | 0.22 | 0.23 | 0.16 | 0.44 | 0.99 | 0.92 | 0.42 | 1.01 | 0.90 |
| Asset Turnover | — | 0.99 | 1.06 | 1.04 | 1.03 | 0.90 | 0.81 | 0.94 | 0.99 | 0.85 | 0.89 |
| Inventory Turnover | 5.41 | 5.41 | 5.58 | 5.52 | 4.66 | 5.09 | 6.33 | 7.17 | 6.67 | 6.98 | 7.55 |
| Days Sales Outstanding | — | 73.41 | 71.08 | 73.67 | 74.98 | 74.29 | 76.08 | 67.55 | 64.80 | 67.01 | 63.26 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.3% | 2.5% | 2.2% | 2.0% | 2.3% | 1.9% | 2.1% | 2.3% | 2.6% | 1.6% | 1.9% |
| Payout Ratio | 58.2% | 58.2% | 48.6% | 54.6% | 50.8% | 54.3% | 65.4% | 52.4% | 43.9% | 55.8% | 40.3% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 3.9% | 4.3% | 4.6% | 3.7% | 4.4% | 3.4% | 3.3% | 4.3% | 6.0% | 2.9% | 4.7% |
| FCF Yield | 3.5% | 3.8% | 3.8% | 3.9% | 2.8% | 2.9% | 4.0% | 4.6% | 5.7% | 3.6% | 4.6% |
| Buyback Yield | 1.9% | 2.1% | 2.0% | 1.9% | 2.6% | 1.3% | 1.1% | 2.6% | 4.7% | 1.7% | 4.6% |
| Total Shareholder Yield | 4.2% | 4.6% | 4.2% | 3.9% | 4.8% | 3.2% | 3.2% | 4.8% | 7.3% | 3.4% | 6.5% |
| Shares Outstanding | — | $292M | $298M | $304M | $311M | $316M | $318M | $326M | $337M | $347M | $357M |
Stagnant Organic Revenue Growth
Based on current market data, ITW trades at a P/E of 25.52, which suggests investors are paying a quality premium for the company's decentralized efficiency compared to broader industrial peers, despite the underlying stagnation in organic growth that may challenge the sustainability of these elevated valuation multiples.
The forward P/E of 23.69 implies that the market expects ITW to maintain its superior operating margins despite cyclical headwinds in its automotive and construction segments. Investors should monitor whether this valuation remains justified if organic growth continues to hover near the 1% level, as the current PEG ratio of 2.66 indicates that the stock is priced for growth that the company is not currently delivering.
According to recent financial reports, ITW's ROIC has fluctuated between 6.7% and 8.2% over the last ten quarters, suggesting that while the company maintains high operating margins, its ability to compound returns on invested capital is constrained by the capital-intensive nature of its niche industrial equipment manufacturing.
The divergence between high ROE and more modest ROIC figures warrants further investigation into the company's leverage profile and its impact on equity returns. The consistent focus on the 80/20 process appears to protect margins, yet the inability to consistently push ROIC above the 8% threshold suggests that capital allocation into new growth initiatives may be yielding diminishing marginal returns.
As reported in quarterly filings, ITW's cash conversion cycle has remained elevated, averaging approximately 120 days over the last ten quarters, which indicates that the company's decentralized structure may be creating operational friction in inventory management and accounts receivable collection compared to more streamlined industrial competitors.
The DSO of 74 days and DIO of 68 days suggest that ITW carries significant working capital relative to its revenue base, which may be a structural byproduct of its long-cycle equipment business. Investors should monitor whether these metrics improve, as any further expansion in the cash conversion cycle could signal a deterioration in customer leverage or an accumulation of obsolete inventory.
Based on reported figures, ITW maintains a debt-to-equity ratio of 2.78, which appears high relative to the industrial sector average and warrants close monitoring, as the company's interest coverage ratio of 13.97 suggests that while debt service is currently comfortable, the margin for error is narrowing.
The reliance on debt to fund consistent shareholder returns through dividends and repurchases may limit the company's flexibility during cyclical downturns. If the automotive or construction segments experience a prolonged contraction, the current leverage levels could become a constraint on the company's ability to maintain its capital allocation strategy without impacting its credit profile.
The P/E ratio is frequently misapplied to ITW because it obscures the impact of the company's 'Product Line Simplification' initiatives, which intentionally depress revenue growth to boost margins, making the company appear less attractive on a growth-adjusted basis than its underlying cash-generative power would suggest.
Analysts should prioritize EV/EBITDA or P/FCF over P/E to better capture the true earning power of the 80/20 business model, as these metrics are less sensitive to the accounting noise created by divestitures and restructuring charges. Relying solely on P/E risks misinterpreting the company's strategic contraction as operational failure, leading to an incorrect assessment of its long-term value creation.
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Quick answers to the most common questions about buying ITW stock.
Illinois Tool Works Inc.'s current P/E ratio is 25.8x. The historical average is 25.6x. This places it at the 70th percentile of its historical range.
Illinois Tool Works Inc.'s current EV/EBITDA is 18.7x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 13.3x.
Illinois Tool Works Inc.'s return on equity (ROE) is 93.7%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 38.9%.
Based on historical data, Illinois Tool Works Inc. is trading at a P/E of 25.8x. This is at the 70th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Illinois Tool Works Inc.'s current dividend yield is 2.25% with a payout ratio of 58.2%.
Illinois Tool Works Inc. has 44.1% gross margin and 26.3% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Illinois Tool Works Inc.'s Debt/EBITDA ratio is 1.9x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.