ITW FCF Yield Analysis

The current FCF yield of 3.3% means that for every $100 of Illinois Tool Works' market value, the company generates about $3.30 in free cash flow—the cash left after operating expenses and capital spending.

That yield sits below the sector median of 4.1%, placing ITW at the 40th percentile among peers, so roughly 60% of comparable companies offer a higher cash return. While the year-over-year change is not available, the quarter-over-quarter movement is +3.1%, yet the longer trajectory is downward, with the latest readings of 3.3%, 3.2%, 3.3%, and 3.5% (most recent first) confirming a decreasing trend over the last eight quarters. A sub-median yield that is still eroding suggests investors are paying a premium for cash generation that is weakening, raising risk if that decline persists. The small QoQ uptick offers some near-term relief but does not reverse the broader slide. This metric supports the overall CAUTIOUS verdict directly, as the combination of low relative yield and a falling trend points to limited cash return versus peers.

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