ITW vs PH

For growth investors, Illinois Tool Works Inc.

(ITW) is the stronger pick with 0. 9% revenue growth year-over-year, versus -0. 4% for Parker-Hannifin Corporation (PH). Illinois Tool Works Inc. (ITW) offers the better valuation at 24. 4x trailing P/E (22. 7x forward), making it the more compelling value choice. Analysts rate Parker-Hannifin Corporation (PH) a "Buy" — based on 38 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. 4x versus Parker-Hannifin Corporation at 32. 7x. On forward P/E, Illinois Tool Works Inc. is actually cheaper at 22. 7x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Parker-Hannifin Corporation wins at 1. 20x versus Illinois Tool Works Inc. 's 2. 36x — a reasonable growth-adjusted valuation.

Over the past 5 years, Parker-Hannifin Corporation (PH) delivered a total return of +186.

4%, compared to +18. 9% for Illinois Tool Works Inc. (ITW). Over 10 years, the gap is even starker: PH returned +737. 4% versus ITW's +189. 4%. 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 Parker-Hannifin Corporation's 1. 00β — meaning PH is approximately 49% more volatile than ITW relative to the S&P 500. On balance sheet safety, Parker-Hannifin Corporation (PH) carries a lower debt/equity ratio of 70% versus 3% for Illinois Tool Works Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Illinois Tool Works Inc.

(ITW) is pulling ahead at 0. 9% versus -0. 4% for Parker-Hannifin Corporation (PH). On earnings-per-share growth, the picture is similar: Parker-Hannifin Corporation grew EPS 24. 2% year-over-year, compared to -10. 4% for Illinois Tool Works Inc.. Over a 3-year CAGR, PH leads at 7. 8% 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.

Illinois Tool Works Inc.

(ITW) is the more profitable company, earning 19. 1% net margin versus 17. 8% for Parker-Hannifin Corporation — meaning it keeps 19. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ITW leads at 26. 3% versus 20. 5% for PH. At the gross margin level — before operating expenses — ITW leads at 44. 1%, 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, Parker-Hannifin Corporation (PH) is the more undervalued stock at a PEG of 1. 20x versus Illinois Tool Works Inc. 's 2. 36x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Illinois Tool Works Inc. (ITW) trades at 22. 7x forward P/E versus 28. 6x for Parker-Hannifin Corporation — 5. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for PH: 17. 6% to $1042. 08.

All stocks in this comparison pay dividends.

Illinois Tool Works Inc. (ITW) offers the highest yield at 2. 4%, versus 0. 7% for Parker-Hannifin Corporation (PH).

For long-horizon retirement investors, Parker-Hannifin Corporation (PH) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1.

00), 0. 7% yield, +737. 4% 10Y return). Both have compounded well over 10 years (PH: +737. 4%, ITW: +189. 4%), 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.