The returns on equity are on the rebound, after hitting a low of 11.80% in 2010. Right now this indicator is on the rebound, as higher expected earnings would certainly improve returns on equity. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
A 13% growth in distributions translates into the dividend payment doubling almost every five and a half years. If we look at historical data, going as far back as 1987, we see that Illinois Tool Works has actually managed to double its dividend every five years on average.
Over the past decade the dividend payout ratio increased from 32% to 42%. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
Currently Illinois Tool Works is trading at 11 times earnings, yields 3.20% and has a sustainable dividend payout. I would consider adding to my position subject to availability of funds.
Full Disclosure: Long ITW