Illinois Tool Works (ITW) manufactures and sells industrial products and equipment worldwide; the stock is my top pick for investors seeking a safe investment idea, explains Jimmy Mengel, editor of The Crow's Nest.
Illinois Tool Works operates through seven segments:
• Automotive OEM
• Food equipment
• Test and measurement and electronics
• Welding
• Polymers and fluids
• Construction products
• Specialty products
The company was founded in 1912 by Byron L. Smith. He put out an ad in the Economist, looking to provide capital to a “high class business (manufacturing preferred) in or near Chicago.” He turned down several initial offers, waiting for the right proposal. And when a group of inventors with an idea to improve gear grinding came along, ITW was born.
It’s now one of the best-performing dividend stocks of the last century. It’s flourished through wars and recessions and has expanded its businesses around the world.
The company is not only a dividend aristocrat; it’s also a dividend king. This means that it’s had over 50 years of consecutive dividend increases. Here are some more details on this dividend king:
• In 2011, Illinois Tool Works had more than 20,000 unexpired patents and pending patent applications worldwide, including 2,900 U.S. patents and 1,116 pending U.S. applications. The company typically ranks in the top 100 of patent issuers in the U.S.
• The company ranked 414 on the Forbes Global 2,000.
• It sports a solid dividend of 2% and a five-year dividend growth rate of 15.5%.
If you invested $10,000 in 1998 and reinvestment the dividends, you'd be looking at around $58,000 today.
The company lost around 20% over the last year, which makes for an attractive long-term dividend position heading into the new year.
