The business behind the dividend
| Measure | ITW | Median | Formula |
|---|---|---|---|
| Return on equity | 95.0% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 38.7% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $2.96bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $2.71bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 26.3% | 15.0% | Operating income ÷ revenue |
| Net margin | 19.1% | 10.2% | Net income ÷ revenue |
| Debt to equity | 2.38x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 14.44x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 1.21x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | 6.22x | 2.30x | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.02x | 1.78x | Operating cash flow ÷ net income |
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 95.0% | 105.2% | 98.1% | 98.2% | 74.3% | 66.3% | 83.2% | 78.7% | 36.8% | 47.8% | 78.7% |
| Return on capital employed | 38.7% | 41.0% | 37.7% | 38.7% | 31.3% | 25.5% | 31.5% | 33.7% | 28.9% | 25.3% | 31.5% |
| Operating margin | 26.3% | 26.8% | 25.1% | 23.8% | 24.1% | 22.9% | 24.1% | 24.3% | 24.3% | 22.5% | 24.1% |
| Net margin | 19.1% | 21.9% | 18.4% | 19.0% | 18.6% | 16.8% | 17.9% | 17.4% | 11.8% | 15.0% | 17.9% |
| Debt to equity | 2.38x | 2.14x | 2.56x | 2.17x | 2.06x | 2.55x | 2.56x | 2.26x | 1.63x | 1.84x | 2.17x |
| Current ratio | 1.21x | 1.36x | 1.33x | 1.41x | 1.84x | 2.52x | 2.90x | 1.63x | 2.38x | 2.22x | 1.63x |
| Cash conversion | 1.02x | 0.94x | 1.20x | 0.77x | 0.95x | 1.33x | 1.19x | 1.10x | 1.42x | 1.13x | 1.10x |
How it compares in industrials
Among the 74 industrials companies here measured on free cash flow, Illinois Tool Works pays out less than 5 of them. The median for that group is 28.1%, against this company’s 65.9%.
Closest on free cash flow
- Union Pacific (UNP) 58.8%
- Paccar (PCAR) 61.7%
- Royal Caribbean Cruises (RCL) 66.7%
- Stanley Black & Decker (SWK) 72.8%
Same sector and same denominator, so the figures are comparable. All 81 in industrials →