Illinois Tool Works Inc. (ITW) vs Otis Worldwide Corporation (OTIS)

Illinois Tool Works Inc. and Otis Worldwide Corporation are both Specialty Industrial Machinery companies. Illinois Tool Works Inc. is the larger, with a market value of $77.2B against $26.8B — 2.9× the size. Otis Worldwide Corporation trades at the lower P/E: 18.2× against 24.6×. Otis Worldwide Corporation grew revenue faster over the last twelve months: 5.24% against 4.30%. Illinois Tool Works Inc. has the higher net margin (19.4% vs 10.2%) and the lower return on invested capital (23.2% vs 69.4%). Both pay a dividend; Otis Worldwide Corporation yields more (2.41% vs 2.40%). Across the 22 metrics below, Otis Worldwide Corporation leads on 12 and Illinois Tool Works Inc. on 10.

Valuation

Metric ITW OTIS Specialty Industrial Machinery median
P/E 24.63 18.20 28.39
P/S 4.74 1.83 2.70
P/B 26.95 n/m 3.02
Price to free cash flow 26.63 15.70 23.32
EV/EBITDA 18.23 14.19 15.39
EV/Sales 5.27 2.34 2.81
Earnings yield 4.06% 5.50% 3.12%
Free cash flow yield 3.75% 6.37% 3.24%

Profitability

Metric ITW OTIS Specialty Industrial Machinery median
Gross margin 44.16% 30.17% 35.90%
Operating margin 26.50% 15.35% 11.22%
Net margin 19.39% 10.17% 7.80%
Free cash flow margin 17.78% 11.66% 9.51%
Return on equity 104.62% (28.00%) 10.50%
Return on assets 19.63% 14.00% 4.60%
Return on invested capital 23.21% 69.35% 5.36%

Growth

Metric ITW OTIS Specialty Industrial Machinery median
Revenue growth (TTM) 4.30% 5.24% 6.45%
EPS growth (last fiscal year) (10.42%) (14.00%) 4.97%
Revenue growth, 5-year CAGR 4.99% 2.50% 8.31%
Net income growth, 5-year CAGR 7.77% 8.84% 5.04%

Health

Metric ITW OTIS Specialty Industrial Machinery median
Debt to equity 3.35 (1.52) 0.35
Current ratio 1.11 0.83 2.11
Net debt to EBITDA 1.76 2.97 1.32

Dividend

Metric ITW OTIS Specialty Industrial Machinery median
Dividend yield 2.40% 2.41% 1.10%
Payout ratio 0.59 0.44 0.31

Size

Metric ITW OTIS Specialty Industrial Machinery median
Market cap 77.23b 26.80b 1.91b

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