GGG vs ITW

For growth investors, Graco Inc.

(GGG) is the stronger pick with 5. 8% revenue growth year-over-year, versus 0. 9% for Illinois Tool Works Inc. (ITW). Illinois Tool Works Inc. (ITW) offers the better valuation at 24. 8x trailing P/E (23. 1x forward), making it the more compelling value choice. Analysts rate Graco Inc. (GGG) a "Hold" — based on 20 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Illinois Tool Works Inc.

(ITW) is the cheapest at 24. 8x versus Graco Inc. at 26. 1x. On forward P/E, Illinois Tool Works Inc. is actually cheaper at 23. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Illinois Tool Works Inc. wins at 2. 41x versus Graco Inc. 's 2. 59x.

Over the past 5 years, Illinois Tool Works Inc.

(ITW) delivered a total return of +21. 6%, compared to +8. 4% for Graco Inc. (GGG). Over 10 years, the gap is even starker: GGG returned +233. 7% versus ITW's +193. 9%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Illinois Tool Works Inc.

(ITW) is the lower-risk stock at 0. 67β versus Graco Inc. 's 0. 80β — meaning GGG is approximately 20% more volatile than ITW relative to the S&P 500. On balance sheet safety, Graco Inc. (GGG) carries a lower debt/equity ratio of 2% versus 3% for Illinois Tool Works Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Graco Inc.

(GGG) is pulling ahead at 5. 8% versus 0. 9% for Illinois Tool Works Inc. (ITW). On earnings-per-share growth, the picture is similar: Graco Inc. grew EPS 9. 2% year-over-year, compared to -10. 4% for Illinois Tool Works Inc.. Over a 3-year CAGR, GGG leads at 1. 4% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Graco Inc.

(GGG) is the more profitable company, earning 23. 3% net margin versus 19. 1% for Illinois Tool Works Inc. — meaning it keeps 23. 3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: GGG leads at 27. 3% versus 26. 3% for ITW. At the gross margin level — before operating expenses — GGG leads at 52. 5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Illinois Tool Works Inc. (ITW) is the more undervalued stock at a PEG of 2. 41x versus Graco Inc. 's 2. 59x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Illinois Tool Works Inc. (ITW) trades at 23. 1x forward P/E versus 25. 7x for Graco Inc. — 2. 6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for GGG: 19. 1% to $95. 67.

All stocks in this comparison pay dividends.

Illinois Tool Works Inc. (ITW) offers the highest yield at 2. 3%, versus 1. 3% for Graco Inc. (GGG).

For long-horizon retirement investors, Illinois Tool Works Inc.

(ITW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 67), 2. 3% yield, +193. 9% 10Y return). Both have compounded well over 10 years (ITW: +193. 9%, GGG: +233. 7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.