Illinois Tool Works (ITW): dividend aristocrat stock hits record high

By:
on Mar 19, 2024
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  • Illinois Tool Works share price has surged to an all-time high.
  • The company’s business is doing well as its growth continues.
  • It is one of the top dividend aristocrats having boosted its dividend for 28 years.

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Illinois Tool Works (NYSE: ITW) stock price has surged to a record high as industrial companies continue thriving. It surged to an all-time high of $268.92 on Monday, meaning it has soared by over 82% in the past five years. This jump has brought its total market cap to almost $80 billion.

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This dividend aristocrat is soaring

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Illinois Tool Works is one of the biggest industrial giants in the United States. It is not a popular brand name but its products are used widely by companies across various sectors.

The company is widely used by firms in industries like automotive, food equipment, test and measurement, welding, polymers & fluids, construction, and specialty products. 

Its automotive is the biggest segment in terms of revenue followed by its food equipment division. It is food equipment is, however, the most profitable of all its divisions.

The company has been growing its business in the past few years. Its total revenue jumped from $14.5 billion in 2021 followed by $15.9 billion and $16.7 billion in 2022 and 2023, respectively. It has also grown its profits have also risen from $3.4 billion to over $4 billion in 2023.

Illinois Tool Works is benefiting from the ongoing recovery of key sectors, including the automobile and the food service industry. The company also expects that the recent headwinds will start to moderate this year as supply chain issues and input costs fall.

Illinois Tool Works expects to continue growing its dividends in the coming years. The company has been growing its dividends in the past 28 years straight. It is also actively repurchasing its shares such that its total outstanding shares have dropped from 344 million in 2017 to 299 million. It had over 354 million in outstanding shares in 2018.

The only challenge for the company is that its key segments are not expected to grow as it did in 2022 and 2023. For example, after growing by 12% in 2022, the company’s automotive OEM will grow by between 3% and 5% this year. Its construction segment is expected to drop by 3% this year after rising by 14% in 2022.

ITW growth

Illinois Tool Works stock forecast

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Illinois Tool Works stock

ITW chart by TradingView

Turning to the weekly chart, we see that the ITW stock price has been in a strong uptrend for a long time. It has continued forming higher highs and higher lows in the past few months.

The stock has remained above all moving averages, which is a positive side. Also, the MACD indicator has moved above the neutral point.

However, the stock has formed a rising wedge pattern, which is a bearish sign. It is now sitting at the upper side of this wedge pattern. 

Therefore, the Illinois Tool Works share price will likely continue to rise in the long term. However, in the near term, because of the rising wedge, there is a likelihood that it will drop as bears target the support at $240.

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