Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois. This week, I fundamentally analyze Illinois Tool Works’ stock. I review Illinois Tool Works’ business segments, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account Illinois Tool Works’ 2021 free cash flow of $2,261 million figure, a 7% growth rate of FCF (growth for the next 10 years), 10% discount rate, 2.437% long term growth rate (growth from 10 year mark in the future to perpetuity), 316 million shares outstanding, and $6,909 million of long term debt, the DCF analysis yields us an intrinsic value of $111.28 per share.
0:24 Business Overview
5:21 Key Ratios Analysis
15:47 Discounted Cash Flow Analysis / Intrinsic Value
Illinois Tool Works’ Website: here.
Morningstar Key Ratios Link: here.
Useful Resources here.
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