4. Illinois Tool Works

Liability Adjusted Cash Flow Yield: 5.21%

Dividend Yield: 2.71%

Return on Invested Capital: 18.62%

The name "Illinois Tool Works" may invoke images of hammers and simple hand tools, but make no mistake, this company has its fingers in a lot of pies -- more than 800.

Some investors and analysts who feel the company must tighten operations to deliver shareholder value, and to that end, Relational Investors LLC (a 2.1% owner of the Glenview, Ill., company) has recently negotiated its way onto the Illinois Tool Works ( ITW) board.

Investors should hope that this activism enhances long-term returns without unsettling the underlying business. After all, Illinois Tool Works has delivered shareholder returns far in excess of the S&P 500 and diversified industrial companies (collectively). If the company was truly stretched too thin, its return on capital would have suffered (the return is more than adequate).

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