Illinois Tool Works (NYSE: ITW) and Icahn Enterprises L.P. (NASDAQ:IEP) are both mid-cap industrial products companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Risk & Volatility

Illinois Tool Works has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Icahn Enterprises L.P. has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Illinois Tool Works and Icahn Enterprises L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Illinois Tool Works 1 7 6 0 2.36
Icahn Enterprises L.P. 0 0 1 0 3.00

Illinois Tool Works currently has a consensus price target of $150.08, suggesting a potential upside of 3.05%. Icahn Enterprises L.P. has a consensus price target of $61.00, suggesting a potential upside of 12.13%. Given Icahn Enterprises L.P.’s stronger consensus rating and higher probable upside, analysts plainly believe Icahn Enterprises L.P. is more favorable than Illinois Tool Works.

Dividends

Illinois Tool Works pays an annual dividend of $2.60 per share and has a dividend yield of 1.8%. Icahn Enterprises L.P. pays an annual dividend of $3.00 per share and has a dividend yield of 5.5%. Illinois Tool Works pays out 42.1% of its earnings in the form of a dividend. Icahn Enterprises L.P. pays out 38.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Icahn Enterprises L.P. has raised its dividend for 53 consecutive years. Icahn Enterprises L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Illinois Tool Works and Icahn Enterprises L.P.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Illinois Tool Works $13.96 billion 3.59 $3.70 billion $6.18 23.57
Icahn Enterprises L.P. $18.67 billion 0.48 $1.85 billion $7.85 6.93

Illinois Tool Works has higher revenue, but lower earnings than Icahn Enterprises L.P.. Icahn Enterprises L.P. is trading at a lower price-to-earnings ratio than Illinois Tool Works, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

74.9% of Illinois Tool Works shares are owned by institutional investors. Comparatively, 96.8% of Icahn Enterprises L.P. shares are owned by institutional investors. 0.9% of Illinois Tool Works shares are owned by insiders. Comparatively, 90.1% of Icahn Enterprises L.P. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Illinois Tool Works and Icahn Enterprises L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Illinois Tool Works 15.50% 46.57% 13.69%
Icahn Enterprises L.P. 6.35% 15.51% 4.18%

Summary

Icahn Enterprises L.P. beats Illinois Tool Works on 10 of the 17 factors compared between the two stocks.

About Illinois Tool Works

Illinois Tool Works Inc. is a manufacturer of industrial products and equipment. The Company operates through seven segments. The Automotive OEM segment produces components and fasteners for automotive-related applications. The Food Equipment segment offers commercial food equipment. The Test & Measurement and Electronics segment produces test and measurement, and electronic manufacturing and maintenance, repair and operations (MRO) solutions. The Welding segment produces welding equipment, consumables and accessories for industrial and commercial applications. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment supplies engineered fastening systems and solutions. The Specialty Products segment produces beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.

About Icahn Enterprises L.P.

Icahn Enterprises L.P. (Icahn Enterprises) is a holding company. The Company’s segments include Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Mining, Real Estate and Home Fashion. The Company’s Investment segment includes various private investment funds. The Company operates its Automotive segment through its ownership in Federal-Mogul Holdings Corporation and IEH Auto Parts Holding LLC. The Company operates Energy segment through its controlling interest in CVR Energy, Inc. It operates its Metals segment through its subsidiary, PSC Metals, Inc. The Company operates its Railcar segment through its ownership interests in American Railcar Industries, Inc. Its Food Packaging segment consists of ownership in Viskase Companies, Inc. The Company’s Real Estate operations consist of rental real estate, property development and associated resorts. It also owns a limited partner interest in Icahn Enterprises Holdings L.P. (Icahn Enterprises Holdings).

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