Analyzing Illinois Tool Works (ITW) & Gardner Denver (GDI)

Illinois Tool Works (NYSE: ITW) and Gardner Denver (NYSE:GDI) are both industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Profitability

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This table compares Illinois Tool Works and Gardner Denver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Illinois Tool Works 11.79% 48.42% 14.17%
Gardner Denver N/A N/A N/A

Analyst Ratings

This is a breakdown of recent ratings and target prices for Illinois Tool Works and Gardner Denver, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Illinois Tool Works 0 9 7 1 2.53
Gardner Denver 0 3 10 0 2.77

Illinois Tool Works currently has a consensus price target of $176.81, indicating a potential upside of 14.06%. Gardner Denver has a consensus price target of $32.45, indicating a potential upside of 2.64%. Given Illinois Tool Works’ higher possible upside, analysts clearly believe Illinois Tool Works is more favorable than Gardner Denver.

Dividends

Illinois Tool Works pays an annual dividend of $3.12 per share and has a dividend yield of 2.0%. Gardner Denver does not pay a dividend. Illinois Tool Works pays out 47.3% of its earnings in the form of a dividend. Illinois Tool Works has raised its dividend for 54 consecutive years.

Earnings & Valuation

This table compares Illinois Tool Works and Gardner Denver’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Illinois Tool Works $14.31 billion 3.70 $1.69 billion $6.59 23.52
Gardner Denver $2.38 billion 2.61 $18.40 million $0.10 316.20

Illinois Tool Works has higher revenue and earnings than Gardner Denver. Illinois Tool Works is trading at a lower price-to-earnings ratio than Gardner Denver, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

77.6% of Illinois Tool Works shares are held by institutional investors. 0.9% of Illinois Tool Works shares are held by company insiders. Comparatively, 1.7% of Gardner Denver shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Illinois Tool Works beats Gardner Denver on 12 of the 17 factors compared between the two stocks.

About Illinois Tool Works

Illinois Tool Works Inc. is a manufacturer of industrial products and equipment. The Company operates through seven segments. The Automotive OEM segment produces components and fasteners for automotive-related applications. The Food Equipment segment offers commercial food equipment. The Test & Measurement and Electronics segment produces test and measurement, and electronic manufacturing and maintenance, repair and operations (MRO) solutions. The Welding segment produces welding equipment, consumables and accessories for industrial and commercial applications. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment supplies engineered fastening systems and solutions. The Specialty Products segment produces beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.

About Gardner Denver

Gardner Denver Holdings, Inc. provides mission-critical flow control and compression equipment; and associated aftermarket parts, consumables, and services in the United States, Europe, the Middle East, Africa, and the Asia Pacific. It operates through three segments: Industrials, Energy, and Medical. The Industrials segment designs, manufactures, markets, and services a range of air compression, vacuum, and blower products, as well as offers associated aftermarket parts, consumables, and services. Its products are used in process-critical applications, such as the operation of industrial air tools, vacuum packaging of food products, aeration of waste water, and others. This segment sells its products through an integrated network of direct sales representatives and independent distributors under the Gardner Denver, CompAir, Elmo Rietschle, Robuschi, and other brand names. The Energy segment engages in the design, manufacture, marketing, and service of a range of displacement and liquid ring vacuum pumps, compressors and integrated systems, and engineered fluid loading and transfer equipment, as well as offers associated aftermarket parts, consumables, and services under the Gardner Denver, Nash, Emco Wheaton, and other brands. It serves customers in upstream, midstream, and downstream energy markets, as well as petrochemical processing, transportation, and general industrial sectors. The Medical segment designs, manufactures, and markets a range of specialized gas, liquid, and precision syringe pumps and compressors for use in oxygen therapy, blood dialysis, patient monitoring, laboratory sterilization and wound treatment, and other applications. This segment sells its products under the Thomas and other brands. Gardner Denver Holdings, Inc. was founded in 1859 and is headquartered in Milwaukee, Wisconsin.

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