RPM vs ITW

For growth investors, Illinois Tool Works Inc.

(ITW) is the stronger pick with 0. 9% revenue growth year-over-year, versus 0. 5% for RPM International Inc. (RPM). RPM International Inc. (RPM) offers the better valuation at 19. 1x trailing P/E (18. 7x forward), making it the more compelling value choice. Analysts rate RPM International Inc. (RPM) a "Buy" — based on 22 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, RPM International Inc.

(RPM) is the cheapest at 19. 1x versus Illinois Tool Works Inc. at 24. 8x. On forward P/E, RPM International Inc. is actually cheaper at 18. 7x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: RPM International Inc. wins at 1. 04x versus Illinois Tool Works Inc. 's 2. 41x — a reasonable growth-adjusted valuation.

Over the past 5 years, Illinois Tool Works Inc.

(ITW) delivered a total return of +21. 6%, compared to +14. 3% for RPM International Inc. (RPM). Over 10 years, the gap is even starker: ITW returned +193. 9% versus RPM's +134. 8%. 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 RPM International Inc. 's 1. 01β — meaning RPM is approximately 50% more volatile than ITW relative to the S&P 500. On balance sheet safety, RPM International Inc. (RPM) carries a lower debt/equity ratio of 103% 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. 5% for RPM International Inc. (RPM). On earnings-per-share growth, the picture is similar: RPM International Inc. grew EPS 17. 3% year-over-year, compared to -10. 4% for Illinois Tool Works Inc.. Over a 3-year CAGR, RPM leads at 3. 2% 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 9. 3% for RPM International Inc. — 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 12. 3% for RPM. 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, RPM International Inc. (RPM) is the more undervalued stock at a PEG of 1. 04x versus Illinois Tool Works Inc. 's 2. 41x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, RPM International Inc. (RPM) trades at 18. 7x forward P/E versus 23. 1x for Illinois Tool Works Inc. — 4. 5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for RPM: 19. 8% to $122. 67.

All stocks in this comparison pay dividends.

Illinois Tool Works Inc. (ITW) offers the highest yield at 2. 3%, versus 1. 9% for RPM International Inc. (RPM).

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%, RPM: +134. 8%), 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.

These companies operate in different sectors (RPM (Basic Materials) and ITW (Industrials)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

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.