WallStSmart

Illinois Tool Works Inc (ITW)vsWatts Water Technologies Inc (WTS)

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Smart Verdict

WallStSmart Research — data-driven comparison

Illinois Tool Works Inc generates 558% more annual revenue ($16.04B vs $2.44B). ITW leads profitability with a 19.1% profit margin vs 14.0%. ITW appears more attractively valued with a PEG of 2.61. WTS earns a higher WallStSmart Score of 58/100 (C).

ITW

Buy

58

out of 100

Grade: C

Growth: 6.7Profit: 9.5Value: 4.7Quality: 5.8
Piotroski: 3/9Altman Z: 4.71

WTS

Buy

58

out of 100

Grade: C

Growth: 7.3Profit: 7.5Value: 7.3Quality: 7.8
Piotroski: 6/9Altman Z: 4.16
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

ITWSignificantly Overvalued (-53.6%)

Margin of Safety

-53.6%

Fair Value

$194.04

Current Price

$266.45

$72.41 premium

UndervaluedFair: $194.04Overvalued
WTSUndervalued (+31.9%)

Margin of Safety

+31.9%

Fair Value

$462.26

Current Price

$297.79

$164.47 discount

UndervaluedFair: $462.26Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

ITW4 strengths · Avg: 9.3/10
Return on EquityProfitability
93.7%10/10

Every $100 of equity generates 94 in profit

Altman Z-ScoreHealth
4.7110/10

Safe zone — low bankruptcy risk

Market CapQuality
$76.38B9/10

Large-cap with strong market position

Operating MarginProfitability
26.8%8/10

Strong operational efficiency at 26.8%

WTS3 strengths · Avg: 8.7/10
Altman Z-ScoreHealth
4.1610/10

Safe zone — low bankruptcy risk

Revenue GrowthGrowth
15.7%8/10

15.7% revenue growth

EPS GrowthGrowth
23.8%8/10

Earnings expanding 23.8% YoY

Areas to Watch

ITW4 concerns · Avg: 3.3/10
P/E RatioValuation
25.2x4/10

Moderate valuation

Revenue GrowthGrowth
4.1%4/10

4.1% revenue growth

Piotroski F-ScoreQuality
3/93/10

Weak financial health signals

PEG RatioValuation
2.612/10

Expensive relative to growth rate

WTS2 concerns · Avg: 3.0/10
P/E RatioValuation
29.0x4/10

Moderate valuation

PEG RatioValuation
3.082/10

Expensive relative to growth rate

Comparative Analysis Report

WallStSmart Research

Bull Case : ITW

The strongest argument for ITW centers on Return on Equity, Altman Z-Score, Market Cap. Profitability is solid with margins at 19.1% and operating margin at 26.8%.

Bull Case : WTS

The strongest argument for WTS centers on Altman Z-Score, Revenue Growth, EPS Growth. Revenue growth of 15.7% demonstrates continued momentum.

Bear Case : ITW

The primary concerns for ITW are P/E Ratio, Revenue Growth, Piotroski F-Score.

Bear Case : WTS

The primary concerns for WTS are P/E Ratio, PEG Ratio.

Key Dynamics to Monitor

ITW profiles as a value stock while WTS is a growth play — different risk/reward profiles.

WTS carries more volatility with a beta of 1.23 — expect wider price swings.

WTS is growing revenue faster at 15.7% — sustainability is the question.

ITW generates stronger free cash flow (858M), providing more financial flexibility.

Bottom Line

ITW scores higher overall (58/100 vs 58/100), backed by strong 19.1% margins. WTS offers better value entry with a 31.9% margin of safety. Both earn "Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

Illinois Tool Works Inc

INDUSTRIALS · SPECIALTY INDUSTRIAL MACHINERY · USA

Illinois Tool Works Inc. or ITW is an American company that produces engineered fasteners and components, equipment and consumable systems, and specialty products.

Watts Water Technologies Inc

INDUSTRIALS · SPECIALTY INDUSTRIAL MACHINERY · USA

Watts Water Technologies, Inc. designs, manufactures and sells products and systems that manage and conserve the flow of fluids and energy to, through and from buildings in the commercial and residential markets of the Americas, Europe, Asia-Pacific, the Middle East and Africa. . The company is headquartered in North Andover, Massachusetts.

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