Why FTV Could Outperform Illinois Tool Works Stock
FTV is Illinois Tool Works’s peer in Industrial Machinery & Supplies & Components industry that has:
1) Lower valuation (P/OpInc) compared to Illinois Tool Works stock
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying FTV stock vs. ITW stock
Individual stocks can soar or tank but one thing matters: staying invested. High Quality Portfolio helps you do that.
- Abbott Laboratories Stock Now 18% Cheaper, Time To Buy
- Texas Instruments Stock Capital Return Hits $53 Bil
- Amgen Stock Shares $86 Bil Success With Investors
- A Decade of Rewards: $54 Bil From United Parcel Service Stock
- PayPal Stock Testing Price Floor – Buy Now?
- Oracle Stock Near Crucial Support – Buy Signal?
Key Metrics Compared
| Metric | ITW | FTV |
|---|---|---|
| P/OpInc* | 19.5x | 14.3x |
| LTM OpInc Growth | -1.4% | 22.6% |
| 3Y Avg OpInc Growth | 4.7% | 12.1% |
| LTM Revenue Growth | -0.4% | 27.9% |
| 3Y Avg Revenue Growth | 0.5% | 9.4% |
OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio
But do these numbers tell the full story? Read Buy or Sell ITW Stock to see if Illinois Tool Works still has an edge that holds up under the hood. As a quick background, Illinois Tool Works (ITW) provides industrial products and equipment globally across seven segments, including automotive, food equipment, electronics, welding, polymers, construction, and specialty products.
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Illinois Tool Works stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Illinois Tool Works in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Illinois Tool Works would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | ITW | FTV |
|---|---|---|
| P/OpInc* | 17.7x | 16.4x |
| LTM OpInc Growth | -3.2% | 10.9% |
| 3Y Avg OpInc Growth | 5.6% | 13.8% |
| LTM Revenue Growth | -1.4% | 17.3% |
| 3Y Avg Revenue Growth | 1.4% | 9.5% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | ITW | FTV |
|---|---|---|
| P/S | 5.1x | 2.5x |
| Market Cap (Current) | $ 81.1 Bil | $ 18.0 Bil |
| LTM Revenue | $ 15.88 Bil | $ 7.24 Bil |
| LTM Opinc | $ 4.16 Bil | $ 1.25 Bil |
| LTM Op Margin | 26.2% | 17.3% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the its benchmark – a combination of S&P 500, Russell, and S&P midcap index.