Illinois Tool Works Inc. manufactures a range of industrial products and equipment worldwide. This dividend champion has raised dividends for 46 years in a row. The company most recently announced a 9.70% dividend increase to 34 cents/share.
Over the past decade, this dividend stock has delivered an annual total return of 5.70%.
At the same time the company has managed to increase earnings per share by 2.30% per year. In 2009, earnings per share declined by 36% due to weak revenues caused by the global recession. Analysts are estimating FY 2010 and FY 2011 EPS to increase to $3.05 and $3.60 respectively. The company derives over 57% of its revenues from international operations. In addition to that it is operating under eight segments: Industrial Packaging, Power Systems & Electronics, Transportation, Construction Products, Food Equipment, Decorative Surfaces, Polymers & Fluids and All Other.
Return on Equity has decreased from 19% in 2000 to 12% in 2009.
Dividends per share have increased by 14% annually over the past decade. A 14% increase in dividends translates into the dividend payment doubling every 5 years on average. Since 1989 the company has indeed managed to raise dividends every 5 years on average.
The dividend payout ratio has more than doubled over the past decade, from 24% in 2000 to 64% in 2009. This is a direct result of the fact that dividends have been increasing much faster than earnings over the past decade.
Currently Illinois Tool Works trades at a P/E of 14.40, yields 2.70% and has an adequately covered dividend payment based off next year’s earnings. I would add to my position there subject to availability of funds in my portfolio.
Full Disclosure: Long ITW
Relevant Articles:
- Automatic Data Processing (ADP) Dividend Stock Analysis
- Wal-Mart (WMT): A High Dividend Growth Stock
- Chubb Corporation (CB) Dividend Stock Analysis
- Family Dollar Stores (FDO) Dividend Stock Analysis...
Popular Posts
-
Dollar cost averaging is a process, where the same amount of funds is allocated to preset investment/s at regular intervals of time. It is ...
-
As an investor, I am aware that I have a lot of blind spots. Someone with a glass half full outlook on life might say that I have a lot of r...
-
Warren Buffett’s Berkshire Hathaway just received a dividend check for $194 million dollars from Coca-Cola. Berkshire Hathaway owns 400 mil...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps in monitoring existing positions a...
-
The Procter & Gamble Company (PG) provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Groomi...
-
One of my favorite charts shows a listing of eleven consumer goods companies, and the brands that they own. It reinforces my belief that str...
-
I review the list of dividend increases as part of my monitoring process. This exercise helps me monitor existing holdings. It also helps me...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps in monitoring existing positions a...
-
The goal of this website is to inspire readers to identify their goals and objectives, and then create a process to achieve them. I shared t...
-
The Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high-dividend-yielding stocks in the U.S. with a record of c...