Illinois Tool Works (NYSE:ITW) and The Eastern (NASDAQ:EML) are both industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.
Profitability
This table compares Illinois Tool Works and The Eastern's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Illinois Tool Works | 16.77% | 80.95% | 14.37% |
The Eastern | 3.60% | 12.08% | 4.59% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Illinois Tool Works and The Eastern, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Illinois Tool Works | 1 | 11 | 4 | 0 | 2.19 |
The Eastern | 1 | 0 | 0 | 0 | 1.00 |
Illinois Tool Works presently has a consensus price target of $206.0625, indicating a potential downside of 7.84%. Given Illinois Tool Works' stronger consensus rating and higher probable upside, equities research analysts plainly believe Illinois Tool Works is more favorable than The Eastern.
Earnings & Valuation
This table compares Illinois Tool Works and The Eastern's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Illinois Tool Works | $14.11 billion | 5.02 | $2.52 billion | $7.75 | 28.85 |
The Eastern | $251.74 million | 0.65 | $13.27 million | N/A | N/A |
Illinois Tool Works has higher revenue and earnings than The Eastern.
Dividends
Illinois Tool Works pays an annual dividend of $4.56 per share and has a dividend yield of 2.0%. The Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Illinois Tool Works pays out 58.8% of its earnings in the form of a dividend. Illinois Tool Works has increased its dividend for 50 consecutive years and The Eastern has increased its dividend for 1 consecutive years. Illinois Tool Works is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Illinois Tool Works has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, The Eastern has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.
Insider & Institutional Ownership
77.4% of Illinois Tool Works shares are held by institutional investors. Comparatively, 65.0% of The Eastern shares are held by institutional investors. 0.8% of Illinois Tool Works shares are held by insiders. Comparatively, 14.3% of The Eastern shares are held 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.
Summary
Illinois Tool Works beats The Eastern on 13 of the 16 factors compared between the two stocks.