Contrasting Illinois Tool Works (NYSE:ITW) & Manitowoc (NYSE:MTW)

Illinois Tool Works (NYSE:ITW) and Manitowoc (NYSE:MTW) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Dividends

Illinois Tool Works pays an annual dividend of $6.88 per share and has a dividend yield of 2.6%. Manitowoc pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Illinois Tool Works pays out 62.4% of its earnings in the form of a dividend. Manitowoc pays out 14.5% 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. Illinois Tool Works has increased its dividend for 55 consecutive years. Illinois Tool Works is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Illinois Tool Works and Manitowoc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Illinois Tool Works	$16.47 billion	4.64	$3.07 billion	$11.03	24.30
Manitowoc	$2.32 billion	0.32	$7.20 million	$0.55	37.91

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

Profitability

This table compares Illinois Tool Works and Manitowoc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Illinois Tool Works	19.39%	101.72%	19.64%
Manitowoc	0.87%	3.86%	1.43%

Insider and Institutional Ownership

79.8% of Illinois Tool Works shares are held by institutional investors. Comparatively, 78.7% of Manitowoc shares are held by institutional investors. 0.8% of Illinois Tool Works shares are held by insiders. Comparatively, 4.0% of Manitowoc shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Illinois Tool Works has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Manitowoc has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Illinois Tool Works and Manitowoc, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Illinois Tool Works	5	6	2	0	1.77
Manitowoc	2	1	0	0	1.33

Illinois Tool Works presently has a consensus price target of $281.25, indicating a potential upside of 4.91%. Manitowoc has a consensus price target of $14.00, indicating a potential downside of 32.85%. Given Illinois Tool Works’ stronger consensus rating and higher possible upside, equities analysts clearly believe Illinois Tool Works is more favorable than Manitowoc.

Summary

Illinois Tool Works beats Manitowoc on 13 of the 17 factors compared between the two stocks.

About Illinois Tool Works

Illinois Tool Works Inc. manufactures and sells industrial products and equipment in the United States and internationally. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, refrigeration, cooking, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces and sells equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; and metal arc welding consumables and related accessories. 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 offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM and tiers, MRO, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, automotive aftermarket end, and other markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

About Manitowoc

The Manitowoc Company, Inc. provides engineered lifting solutions in the Americas, Europe, Africa, the Middle East, the Asia Pacific, and internationally. It designs, manufactures, and distributes crawler-mounted lattice-boom cranes under the Manitowoc brand; a line of top-slewing and self-erecting tower cranes under the Potain brand; mobile hydraulic cranes under the Grove, Shuttlelift, and National Crane brands; and hydraulic boom trucks under the National Crane brand. The company also provides aftermarket services, such as sale of parts and accessories, field service work, routine maintenance services, technical support, erection and decommissioning services, crane and component remanufacturing, training, and telematics services. Its crane products are used in various applications, including energy production/distribution and utilities; petrochemical and industrial; infrastructure, such as road, bridge, and airport construction; and commercial and residential construction. The company serves a range of customers, including dealers, rental companies, contractors, and government entities in the petrochemical, industrial, commercial construction, power and utilities, infrastructure, and residential construction end markets. The Manitowoc Company, Inc. was founded in 1902 and is headquartered in Milwaukee, Wisconsin.