ITW dividend
ITW pays a quarterly dividend of $1.72, and its shareholder payments exceeded annual free cash flow in every year shown. Recurring cash therefore did not cover all shareholder payments in every year shown.
How much does ITW pay its shareholders?
The 2026 policy continues the approach. The board authorized up to $6 billion of repurchases and raised the dividend by 7%. The quarterly dividend became $1.72. The central question is not whether ITW can distribute cash, but whether those distributions are covered by recurring cash after the business funds its future.
The dividend begins from the $6.88 annualized run rate after the latest $1.72 quarterly payment. The base case applies roughly 7% annual increases, reaching $8.43 per share in 2029, because dividends have risen from $4.72 in 2021 to $6.22 in 2025. The bear case holds the rate initially and then grows it by 2%, while the bull case applies 9% growth. The restraint reflects first-half free cash flow of $1.159 billion against $1.583 billion of net income.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow per share | 9.26 | 9.55 | 10.16 | 6.23 | 7.15 |
| − Dividends paid, per share | 6.11 | 5.69 | 5.32 | 4.96 | 4.62 |
| = Paid out more than FCF, per share | 1.98 | 1.18 | 0.10 | 4.36 | 0.64 |
What this means. The company's own free cash flow per share is higher because it does not subtract shares given to employees as pay; we subtract them.
Is ITW's dividend covered by its cash?
ITW’s shareholder payments exceeded its annual free cash flow in every year shown.
Free cash flow is the cash left after normal operations and spending on plant and equipment. It is the pool a company can use for dividends, buybacks, acquisitions, and debt repayment. If payouts exceed that pool, the company must use cash already held, sell assets, or borrow.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 2,707 | 2,844 | 3,084 | 1,936 | 2,261 |
| − Dividends paid | 1,785 | 1,695 | 1,615 | 1,542 | 1,463 |
| − Share buybacks | 1,500 | 1,500 | 1,500 | 1,750 | 1,000 |
| = Paid out more than the free cash flow | 578 | 351 | 31 | 1,356 | 202 |
| Paid out, % of free cash flow | 121.4% | 112.3% | 101.0% | 170.0% | 108.9% |
What this means. The company paid shareholders more cash than it generated, so it had to use savings or borrow money to cover the difference.
What could change ITW's dividend?
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Net asset value | 3,364 (2,464 / 3,986) | 3,464 (1,844 / 4,806) | 3,564 (1,374 / 5,926) |
| Dividends per share | 7.36 (6.88 / 7.50) | 7.88 (7.02 / 8.18) | 8.43 (7.16 / 8.92) |
| Price to net asset value | 25.00 (20.00 / 28.00) | 24.00 (18.00 / 30.00) | 23.00 (16.00 / 32.00) |
What this means. Price to net asset value shows how many times the value of the company's assets per share investors are paying for one share.