Illinois Tool Works (NYSE:ITW – Get Free Report) and DXP Enterprises (NASDAQ:DXPE – Get Free Report) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.
Risk and Volatility
Illinois Tool Works has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Earnings & Valuation
This table compares Illinois Tool Works and DXP Enterprises”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Illinois Tool Works | $15.90 billion | 4.81 | $3.49 billion | $11.41 | 22.97 |
| DXP Enterprises | $1.80 billion | 1.06 | $70.49 million | $5.24 | 23.18 |
Illinois Tool Works has higher revenue and earnings than DXP Enterprises. Illinois Tool Works is trading at a lower price-to-earnings ratio than DXP Enterprises, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings for Illinois Tool Works and DXP Enterprises, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Illinois Tool Works | 3 | 8 | 1 | 0 | 1.83 |
| DXP Enterprises | 0 | 0 | 1 | 0 | 3.00 |
Illinois Tool Works presently has a consensus price target of $260.67, indicating a potential downside of 0.54%. DXP Enterprises has a consensus price target of $95.00, indicating a potential downside of 21.77%. Given Illinois Tool Works’ higher probable upside, research analysts clearly believe Illinois Tool Works is more favorable than DXP Enterprises.
Profitability
This table compares Illinois Tool Works and DXP Enterprises’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Illinois Tool Works | 21.31% | 90.89% | 19.17% |
| DXP Enterprises | 4.52% | 20.94% | 6.77% |
Insider & Institutional Ownership
79.8% of Illinois Tool Works shares are owned by institutional investors. Comparatively, 74.8% of DXP Enterprises shares are owned by institutional investors. 0.9% of Illinois Tool Works shares are owned by company insiders. Comparatively, 22.4% of DXP Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Illinois Tool Works beats DXP Enterprises on 9 of the 13 factors compared between the two stocks.
About Illinois Tool Works
Illinois Tool Works Inc. manufactures and sells industrial products and equipment in the United States and internationally. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, refrigeration, cooking, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces and sells equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM and tiers, MRO, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, automotive aftermarket end, and other markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.
About DXP Enterprises
DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory vinventory optimization and management, storeroom management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. DXP Enterprises, Inc. was founded in 1908 and is based in Houston, Texas.
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