ITW Price Forecast Based on Dividend Discount Model

The Dividend Discount Model (DDM) is a valuation model that attempts to determine a fair share price for a stock, based on the dividend it provides in comparison to several company-specific metrics indicative of the riskiness of the stock and the financial health of the company. Regarding Illinois Tool Works Inc, the DDM model, as implemented by StockNews, implies a negative return of 26.16% relative to its current price. To help understand and contextualize the model's evaluation of ITW, investors may wish to consider are:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Industrials sector, the expected return of -26.16%, based on the stock's current share price and target price based on a dividend discount model, is greater than 65.65% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, ITW has a discount rate lower than 65.65% of them (a lower discount rate is associated with lower risk).
• Illinois Tool Works Inc has annual revenue of approximately $14 billion; this classifies the stock in the large-sized revenue class -- and relative to other dividend issuers in this class, the growth rate of its dividend is greater than that of 67.25% of them.

ITW Dividends vs. Peers