Illinois Tool Works
On August 3, Illinois Tool Works (ITW) announced that its board authorized a 28% increase to its quarterly cash dividend—an increase of $0.22 per share or $0.88 per share annually. As a result, the new quarterly dividend rate will reflect $1.00 per share or $4.00 per year. The new rate will be effective for the next dividend that’s expected to be paid on October 9. Based on the current stock price, Illinois Tool Works’ forward dividend yield would be ~2.86%.
Illinois Tool Works’ board approved a new share repurchase program that allows the company to buy back $3 billion common shares. However, the company still has $1.4 billion from its previously approved share repurchase program of $6 billion.
On the day the dividend increase was announced, Illinois Tool Works stock ended positively. For the week ending August 3, the stock declined ~0.5% and closed at $139.55. As a result, the stock was 5.7%% below its 100-day moving average of $147.94, which indicates a downward trend in the stock. On a year-to-date basis, the stock has declined 15.6%. In comparison, Stanley Black & Decker (SWK), 3M (MMM), and General Electric (GE) have declined 14.8%, 11.9%, and 26.9%, respectively.
However, analysts are bullish on the stock and have recommended a target price of $153.30, which implies 9.9% upside based on its closing price on August 3. The company’s 14-day RSI (relative strength index) score of 46 indicates that the stock isn’t overbought or oversold. Investors can hold Illinois Tool Works indirectly through the Industrial Select Sector SPDR Fund (XLI), which had 1.8% of its portfolio invested in Illinois Tool Works as of August 3.