12 Best Industrial Dividend Stocks to Invest in Now

8. Illinois Tool Works Inc. (NYSE:ITW)

Number of Hedge Fund Holders: 49

Illinois Tool Works Inc. (NYSE:ITW) is a diversified industrial company operating across seven key segments, including automotive original equipment manufacturing, construction products, food equipment, polymers and fluids, specialty products, test and measurement and electronics, and welding. In 2024, the company allocated approximately $800 million to drive long-term expansion within its core business areas and aims to further accelerate its customer-back innovation (CBI) investments in the years ahead. As part of its commitment to innovation and solving customer challenges, the company also increased its patent filings by 18% during the year.

In the fourth quarter of 2024, Illinois Tool Works Inc. (NYSE:ITW) posted revenue of $3.9 billion, down 1.28% from the same period last year. The revenue also missed analysts’ estimates by over $50 million. However, the company’s GAAP earnings per share (EPS) rose 7% to $2.54. Its operating margin improved to 26.2%, reflecting a 140-basis-point increase, with enterprise initiatives accounting for 120 basis points of the gain.

Illinois Tool Works Inc. (NYSE:ITW) is one of the best industrial dividend stocks with a solid cash position. In the most recent quarter, the company generated $1.1 billion in operating cash flow, while free cash flow reached a record $1 billion, reflecting a 10% increase and a conversion rate of 133%. For FY25, the company expects free cash flow to exceed net income and intends to buy back around $1.5 billion worth of its shares. The anticipated effective tax rate is estimated to range between 24% and 24.5%.

Illinois Tool Works Inc. (NYSE:ITW) currently offers a quarterly dividend of $1.50 per share and has a dividend yield of 2.34%, as of March 17. In 2024, the company extended its dividend growth streak to 52 years.