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-- Illinois Tool Works



) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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    Highlights from the ratings report include:

      • ITW's revenue growth trails the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
      • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
      • 37.80% is the gross profit margin for ILLINOIS TOOL WORKS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.70% is above that of the industry average.
      • Net operating cash flow has significantly increased by 123.37% to $323.00 million when compared to the same quarter last year. In addition, ILLINOIS TOOL WORKS has also vastly surpassed the industry average cash flow growth rate of -66.36%.
      • ILLINOIS TOOL WORKS's earnings per share declined by 19.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ILLINOIS TOOL WORKS increased its bottom line by earning $4.07 versus $2.89 in the prior year. This year, the market expects an improvement in earnings ($4.25 versus $4.07).

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      Illinois Tool Works Inc. manufactures various industrial products and equipment worldwide. The company has a P/E ratio of 14.4, above the average industrial industry P/E ratio of 14and below the S&P 500 P/E ratio of 17.7. Illinois Tool Works has a market cap of $26.46 billion and is part of the

      industrial goods

      sector and


      industry. Shares are up 17.6% year to date as of the close of trading on Wednesday.

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      Illinois Tool Works Ratings Report

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      --Written by a member of TheStreet Ratings Staff.

      TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.