W. W. Grainger vs Illinois Tool Works
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KIRA’s take AI analyst
I put W. W. Grainger and Illinois Tool Works side by side, using each one’s latest annual report. Here is what stands out:
- W. W. Grainger is the larger business, with $17.9B of revenue in fiscal 2025 against $16.0B for Illinois Tool Works.
- W. W. Grainger grew revenue faster (4.5%, against 0.9%).
- Illinois Tool Works kept more of each dollar of sales as operating profit (26.3% operating margin, against 13.9%).
- Illinois Tool Works turned more of its sales into free cash flow (16.9% FCF margin, against 7.4%).
- W. W. Grainger earned a higher return on the capital invested in it (32.3%, against 30.2%).
- Investors pay more for each dollar of W. W. Grainger’s earnings: a P/E of 34.2x against 25.0x for Illinois Tool Works.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
W. W. Grainger
GWW
5/11
Revenue growth5-year growthReturn on capitalNet debt / EBITDAShare count change
Illinois Tool Works
ITW
5/11
Gross marginOperating marginNet marginFCF marginReturn on equity
Side by side
Best in the row
| Latest fiscal year | GWW FY25 | ITW FY25 |
|---|---|---|
| Size | ||
| Market cap | $63.4B | $79.2B |
| Revenue | $17.9B | $16.0B |
| Free cash flow | $1.3B | $2.7B |
| Net income | $1.7B | $3.1B |
| Growth | ||
| Revenue growth | 4.5% | 0.9% |
| 5-year growth | 8.8% | 5.0% |
| Share count change | −2.0% | −1.9% |
| Profitability | ||
| Gross margin | 39.1% | 52.9% |
| Operating margin | 13.9% | 26.3% |
| Net margin | 9.5% | 19.1% |
| FCF margin | 7.4% | 16.9% |
| Return on capital | 32.3% | 30.2% |
| Return on equity | 48.1% | 93.7% |
| Balance sheet | ||
| Net debt | $1.9B | $8.1B |
| Net debt / EBITDA | 0.7x | 1.8x |
| Dividends and buybacks | $1.5B | $3.3B |
| Valuation & quality | ||
| P/E | 34.2x | 25.0x |
| Piotroski F-score | 6 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.