Head-To-Head Comparison: Ingersoll-Rand (NYSE:IR) versus Illinois Tool Works (NYSE:ITW)

Ingersoll-Rand (NYSE:IR) and Illinois Tool Works (NYSE:ITW) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Insider & Institutional Ownership

80.0% of Illinois Tool Works shares are owned by institutional investors. 0.7% of Ingersoll-Rand shares are owned by insiders. Comparatively, 0.9% of Illinois Tool Works shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Ingersoll-Rand and Illinois Tool Works’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingersoll-Rand $2.45 billion 1.96 $159.10 million $0.76 30.80
Illinois Tool Works $14.11 billion 3.40 $2.52 billion $7.75 19.42

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

Profitability

This table compares Ingersoll-Rand and Illinois Tool Works’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingersoll-Rand 6.49% 8.86% 3.47%
Illinois Tool Works 17.87% 81.83% 16.62%

Risk & Volatility

Ingersoll-Rand has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Illinois Tool Works has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Ingersoll-Rand and Illinois Tool Works, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingersoll-Rand 0 7 9 0 2.56
Illinois Tool Works 4 8 2 0 1.86

Ingersoll-Rand currently has a consensus price target of $118.00, indicating a potential upside of 404.06%. Illinois Tool Works has a consensus price target of $156.00, indicating a potential upside of 3.66%. Given Ingersoll-Rand’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ingersoll-Rand is more favorable than Illinois Tool Works.

Summary

Illinois Tool Works beats Ingersoll-Rand on 9 of the 14 factors compared between the two stocks.

About Ingersoll-Rand

Ingersoll-Rand Plc designs, manufactures, sells, and services industrial and commercial products. The company operates through Climate and Industrial segments. The Climate segment offers air conditioners, exchangers, and handlers; airside and terminal devices; auxiliary power units; chillers; coils and condensers; gensets; furnaces; heat pumps; home automation; humidifiers; hybrid and non-diesel transport refrigeration, and ice energy storage solutions; indoor air quality; industrial refrigeration; motor replacements; refrigerant reclamation; thermostats/controls; transport heater products; and water source heat pumps. It also provides building management; bus, rail, and multi-pipe hvac; control; container, cryogenic, diesel-powered, industrial, rail, self-powered truck, trailer, and vehicle-powered truck refrigeration; ductless; geothermal; package heating and cooling; temporary heating and cooling; and unitary systems, as well as aftermarket and OEM parts and supplies. In addition, this segment offers energy and facility management, installation and performance contracting, repair and maintenance, and rental services. The Industrial segment provides air treatment and separation, engine starting, ergonomic material handling, fluid handling, precision fastening, and mobile golf information systems; and airends, blowers, compressors, dryers, filters, golf vehicles, hoists, fluid power components, power tools, pumps, rough terrain vehicles, utility and low-speed vehicles, and winches, as well as aftermarket controls, parts, accessories, and consumables. It also provides aftermarket and OEM parts and supplies. The company markets and sells its products under the American Standard, ARO, Club Car, Nexia, Thermo King, and Trane brands through sales offices, distributors, and dealers in the United States; and through sales and service companies with a supporting chain of distributors worldwide. Ingersoll-Rand Plc was founded in 1871 and is headquartered in Swords, Ireland.

About Illinois Tool Works

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; metal arc welding consumables and related accessories; and metal jacketing and other insulation products for various 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 offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment offers beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM/tiers, commercial food equipment, construction, general industrial, and automotive aftermarket end markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

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