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Illinois Tool Works Inc. (ITW) - free report >>
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Illinois Tool Works Inc. (ITW) - free report >>
Gorman-Rupp Company (The) (GRC) - free report >>
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Illinois Tool Rewards Shareholders with 18% Dividend Hike
Industrial tool manufacturer Illinois Tool Works Inc. (ITW - Free Report) recently announced an 18% increase in its quarterly dividend rate.
As revealed, Illinois Tool Works’ board of directors approved a dividend of 65 cents per share, above the previous quarterly rate of 55 cents per share. On an annualized basis, the dividend has increased to $2.60 from $2.20 per share.
Illinois Tool Works will pay the revised quarterly dividend on Oct 6, 2016 to shareholders of record on Sep 30.
Illinois Tool Works follows a consistent policy of rewarding its shareholders handsomely through dividend payments and share buybacks. In the first half of 2016, the company repurchased roughly $1 billion worth of shares and distributed dividends worth $398 million. For 2016, the company targets repurchasing shares worth $2 billion. We believe such disbursements reflect the company’s strong cash position, with free cash flow conversion predicted to be greater than 100%.
In second-quarter 2016, Illinois Tool Works reported better-than-expected results, recording a positive earnings surprise of 4.3% and sales surprise of 0.9%. The results were primarily driven by organic growth initiatives, operating margin improvement and lower share count. For 2016, the company increased its earnings guidance to $5.50−$5.70 per share from the previous projection of $5.40−$5.60. Over the last 60 days, the Zacks Consensus for the stock has increased 2.2% to $5.63 per share for 2016 and 1.7% to $6.14 per share for 2017. These estimates reflect year-over-year growth of 9.7% for 2015 and 9.1% for 2016.
ILL TOOL WORKS Price and Consensus
ILL TOOL WORKS Price and Consensus | ILL TOOL WORKS Quote
With a market capitalization of nearly $42 billion, Illinois Tool Works presently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the machinery industry include Gorman-Rupp Co. (GRC - Free Report) , Tennant Company (TNC - Free Report) and Luxfer Holdings PLC (LXFR - Free Report) . While both Gorman-Rupp and Tennant Company sport a Zacks Rank #1 (Strong Buy), Luxfer Holdings carries the same Zacks Rank as Illinois Tool Works.
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