Illinois Tool Works’ Dividend Growth Makes It a Strong Industrial Stock

Illinois Tool Works Inc. (NYSE:ITW) is included among the 13 Best Industrial Dividend Stocks to Buy Right Now.

Illinois Tool Works’ Dividend Growth Makes It a Strong Industrial Stock

A factory in operation, its machinery humming as new industrial products get built.

The company stands out as a strong example of setting bold objectives, meeting them, and delivering long-term value to its shareholders. Between 2012 and 2023, ITW implemented its Enterprise Strategy, which led to a rise of over 9 percentage points in operating margin, more than tripled both its earnings per share and market capitalization, and grew its dividend by 3.7 times.

Illinois Tool Works Inc. (NYSE:ITW) currently offers a quarterly dividend of $1.50 per share, with a dividend yield of 2.31%, as of July 13. The company has been rewarding its shareholders with growing dividends for the past 52 years.

Illinois Tool Works Inc. (NYSE:ITW) aims to reach a 30% operating margin by 2030 and deliver average annual earnings per share growth of 9% to 10%, which would allow for a 7% yearly increase in its dividend. The company also plans to turn all of its net income into free cash flow, helping to fund rising dividends, share repurchases, and ongoing investments in the business. While the strategy is ambitious, ITW’s consistent improvement in operating margin over time shows that it’s achievable.

While we acknowledge the potential of ITW to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ITW and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.