Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Illinois Tool Works Inc., current price multiples
| Illinois Tool Works Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | $217.72 | ||||||||||||
| No. shares of common stock outstanding | 312,926,939 | ||||||||||||
| Growth rate (g) | 31.62% | ||||||||||||
| Earnings per share (EPS) | $8.61 | ||||||||||||
| Next year expected EPS | $11.33 | ||||||||||||
| Operating profit per share | $11.11 | ||||||||||||
| Sales per share | $46.19 | ||||||||||||
| Book value per share (BVPS) | $11.58 | ||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | 25.29 | — | 19.47 | 44.11 | 21.30 | 24.87 | 18.90 | 50.65 | 79.37 | 41.37 | |||
| Price to next year expected earnings | 19.21 | — | 15.90 | 41.40 | 20.95 | 21.44 | 11.97 | 49.63 | 81.33 | 43.32 | |||
| Price-earnings-growth (PEG) | 0.80 | — | 0.87 | 6.75 | 12.96 | 1.55 | 0.33 | 24.67 | — | — | |||
| Price to operating profit (P/OP) | 19.59 | — | 15.52 | 36.54 | 35.69 | 19.86 | 15.38 | 45.45 | 31.80 | 26.96 | |||
| Price to sales (P/S) | 4.71 | 1.17 | 3.15 | 6.12 | 3.03 | 3.84 | 1.94 | 2.35 | 2.90 | 2.64 | |||
| Price to book value (P/BV) | 18.79 | — | 10.32 | 7.46 | 7.15 | 8.87 | 19.14 | 2.71 | 6.61 | 6.82 | |||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Illinois Tool Works Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Valuation ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | Illinois Tool Works Inc. P/E ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level. |
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | Illinois Tool Works Inc. P/OP ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level. |
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | Illinois Tool Works Inc. P/S ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021. |
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. | Illinois Tool Works Inc. P/BV ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021. |
Price to Earnings (P/E)
Illinois Tool Works Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 316,662,263 | 318,864,237 | 328,108,383 | 341,545,719 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Earnings per share (EPS)2 | 8.61 | 6.66 | 7.91 | 7.81 | 4.94 | |
| Share price1, 3 | 217.72 | 200.98 | 187.86 | 144.21 | 163.36 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 25.29 | 30.18 | 23.76 | 18.46 | 33.07 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 16.82 | 36.80 | 12.36 | — | — | |
| Eaton Corp. plc | 27.77 | 37.46 | 18.06 | — | — | |
| GE Aerospace | — | 19.67 | — | — | — | |
| Honeywell International Inc. | 23.14 | 29.63 | 20.97 | — | — | |
| Lockheed Martin Corp. | 16.70 | 13.44 | 19.87 | — | — | |
| RTX Corp. | 36.79 | — | 24.41 | — | — | |
| P/E Ratio, Sector | ||||||
| Capital Goods | 57.31 | 123.55 | 39.03 | — | — | |
| P/E Ratio, Industry | ||||||
| Industrials | 33.32 | 161.96 | 49.05 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 2,694,000,000 ÷ 312,926,939 = 8.61
3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 217.72 ÷ 8.61 = 25.29
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | Illinois Tool Works Inc. P/E ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level. |
Price to Operating Profit (P/OP)
Illinois Tool Works Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 316,662,263 | 318,864,237 | 328,108,383 | 341,545,719 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 3,477) | 2,882) | 3,402) | 3,584) | 3,494) | |
| Operating profit per share2 | 11.11 | 9.10 | 10.67 | 10.92 | 10.23 | |
| Share price1, 3 | 217.72 | 200.98 | 187.86 | 144.21 | 163.36 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 19.59 | 22.08 | 17.61 | 13.20 | 15.97 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 15.87 | 24.23 | 9.08 | — | — | |
| Eaton Corp. plc | 19.33 | 25.83 | 13.95 | — | — | |
| GE Aerospace | 17.46 | 25.64 | 9.22 | — | — | |
| Honeywell International Inc. | 20.68 | 24.86 | 18.81 | — | — | |
| Lockheed Martin Corp. | 11.56 | 10.63 | 14.49 | — | — | |
| RTX Corp. | 28.68 | — | 15.07 | — | — | |
| P/OP Ratio, Sector | ||||||
| Capital Goods | 22.96 | 70.31 | 17.55 | — | — | |
| P/OP Ratio, Industry | ||||||
| Industrials | 21.72 | 48.99 | 19.39 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 3,477,000,000 ÷ 312,926,939 = 11.11
3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 217.72 ÷ 11.11 = 19.59
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | Illinois Tool Works Inc. P/OP ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level. |
Price to Sales (P/S)
Illinois Tool Works Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 316,662,263 | 318,864,237 | 328,108,383 | 341,545,719 | |
| Selected Financial Data (US$) | ||||||
| Operating revenue (in millions) | 14,455) | 12,574) | 14,109) | 14,768) | 14,314) | |
| Sales per share2 | 46.19 | 39.71 | 44.25 | 45.01 | 41.91 | |
| Share price1, 3 | 217.72 | 200.98 | 187.86 | 144.21 | 163.36 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 4.71 | 5.06 | 4.25 | 3.20 | 3.90 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | 1.87 | 1.96 | 2.34 | — | — | |
| Caterpillar Inc. | 2.26 | 2.83 | 1.48 | — | — | |
| Eaton Corp. plc | 3.03 | 2.96 | 1.87 | — | — | |
| GE Aerospace | 1.50 | 1.41 | 1.18 | — | — | |
| Honeywell International Inc. | 3.73 | 4.34 | 3.51 | — | — | |
| Lockheed Martin Corp. | 1.57 | 1.40 | 2.07 | — | — | |
| RTX Corp. | 2.21 | 1.95 | 1.75 | — | — | |
| P/S Ratio, Sector | ||||||
| Capital Goods | 2.09 | 2.11 | 1.92 | — | — | |
| P/S Ratio, Industry | ||||||
| Industrials | 2.13 | 2.17 | 1.88 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Operating revenue ÷ No. shares of common stock outstanding
= 14,455,000,000 ÷ 312,926,939 = 46.19
3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 217.72 ÷ 46.19 = 4.71
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | Illinois Tool Works Inc. P/S ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021. |
Price to Book Value (P/BV)
Illinois Tool Works Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 316,662,263 | 318,864,237 | 328,108,383 | 341,545,719 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity attributable to ITW (in millions) | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Book value per share (BVPS)2 | 11.58 | 10.05 | 9.49 | 9.92 | 13.42 | |
| Share price1, 3 | 217.72 | 200.98 | 187.86 | 144.21 | 163.36 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 18.79 | 20.01 | 19.80 | 14.54 | 12.17 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 6.62 | 7.20 | 5.16 | — | — | |
| Eaton Corp. plc | 3.63 | 3.54 | 2.48 | — | — | |
| GE Aerospace | 2.64 | 2.89 | 3.66 | — | — | |
| Honeywell International Inc. | 6.91 | 8.07 | 6.97 | — | — | |
| Lockheed Martin Corp. | 9.62 | 15.27 | 39.60 | — | — | |
| RTX Corp. | 1.95 | 1.53 | 3.24 | — | — | |
| P/BV Ratio, Sector | ||||||
| Capital Goods | 4.77 | 5.05 | 6.91 | — | — | |
| P/BV Ratio, Industry | ||||||
| Industrials | 5.49 | 5.98 | 6.61 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity attributable to ITW ÷ No. shares of common stock outstanding
= 3,625,000,000 ÷ 312,926,939 = 11.58
3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 217.72 ÷ 11.58 = 18.79
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. | Illinois Tool Works Inc. P/BV ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021. |