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ITW vs ZWS
Which Stock Would AI Choose? Illinois Tool Works (ITW) vs. Zurn Elkay Water Solutions (ZWS) Stock Comparison
Key Takeaways
- ITW is a diversified industrial conglomerate with ~$79 billion market cap, while ZWS is a focused water management pure-play with roughly $8 billion market cap, offering contrasting risk-reward profiles.
- ITW delivered record operating margins of 26.3% in 2025 and maintains a 62-year streak of consecutive dividend increases, signaling capital return consistency.
- ZWS posted 8% core sales growth in 2025 and expanded adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margins by 120 basis points, reflecting strong execution in resilient end-markets.
- Both companies are navigating U.S. tariff impacts, but ZWS has demonstrated greater organic revenue momentum with 10% core sales growth in Q4 2025 compared to ITW's more modest 1-2% organic expansion.
- ITW's breadth across seven industrial segments provides stability, while ZWS's concentrated exposure to non-residential construction and water infrastructure presents higher growth potential alongside narrower sector risk.
- ITW offers a compelling dividend yield above 2% with aggressive buybacks, whereas ZWS is reinvesting heavily and recently boosted its dividend by 22%, signaling confidence in sustained cash generation.
Introduction
Investors comparing ITW (Illinois Tool Works) and ZWS (Zurn Elkay Water Solutions) are weighing two distinctly positioned industrial companies that operate at very different scales. ITW is a Fortune 300 multi-industrial manufacturer with $16 billion in annual revenue and a presence across seven diverse industrial segments. ZWS, by contrast, is a specialized water management company with roughly $1.7 billion in revenue, focused exclusively on specification-driven water safety, filtration, and plumbing solutions. Both have posted solid financial results in recent quarters, yet their growth trajectories, market dynamics, and investor appeal diverge meaningfully. This comparison is especially relevant for those assessing the trade-offs between diversified stability and focused growth within the industrial sector.
ITW Overview and Recent Performance
ITW operates as a global multi-industrial manufacturer serving automotive OEM (original equipment manufacturer), food equipment, test and measurement, welding, polymers, construction, and specialty products markets. The company's proprietary "ITW Business Model" — a decentralized, entrepreneurial framework emphasizing customer-back innovation — has been a defining driver of its margin leadership. In 2025, ITW delivered GAAP (Generally Accepted Accounting Principles) earnings per share (EPS) of $10.49, surpassing the midpoint of its own guidance, while generating $2.7 billion in free cash flow and expanding operating margins to a record 26.3%.
In recent market activity, ITW shares have traded in a range roughly between $239 and $303 over the past 52 weeks, reflecting the tug-of-war between steady execution and macro uncertainty. The company's organic growth has been relatively subdued — essentially flat in 2025 — though pricing actions and enterprise initiatives successfully offset tariff headwinds. For 2026, management projects GAAP EPS of $11.00 to $11.40, representing roughly 7% growth at the midpoint. ITW continues to return substantial capital to shareholders, repurchasing $1.5 billion in stock annually and maintaining a 62-year dividend growth streak — a record that underscores its financial discipline and shareholder-first ethos.
ZWS Overview and Recent Performance
ZWS is a pure-play water management solutions provider headquartered in Milwaukee, Wisconsin. The company designs and manufactures water safety and control products, flow systems, hygienic and environmental products, and filtered drinking water solutions for commercial, institutional, and residential applications. Following the integration of Elkay Manufacturing in 2022, ZWS now commands a broad product portfolio serving schools, hospitals, office buildings, and public facilities — end-markets that benefit from regulatory requirements and recurring specification-driven demand.
ZWS closed 2025 with record annual sales of $1.696 billion, 8% core sales growth, and adjusted EBITDA of $442 million, representing a margin of 26.1% — a 120-basis-point improvement year over year. In the fourth quarter alone, core sales surged 10%, reflecting both pricing realization and resilient demand in non-residential construction. Free cash flow reached a record $317 million for the full year, enabling the company to repurchase $160 million in shares and boost its quarterly dividend by 22%. Net debt leverage fell to just 0.4x by year-end, the lowest level since becoming a public company. Looking ahead, ZWS guided for mid-single-digit core sales growth in 2026, with incremental adjusted EBITDA margins approaching 35% and free cash flow projected around $335 million. The company continues to navigate tariff exposure, with an estimated $50 million in tariff-related costs in 2025, largely offset through pricing and supply chain repositioning away from China-sourced materials.
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Head-to-Head Comparison
The most striking difference between ITW and ZWS is scale: ITW generates nearly ten times the revenue of ZWS and commands a market capitalization roughly ten times larger. This size disparity translates into meaningfully different growth profiles. ITW delivered essentially flat organic growth in 2025, relying on pricing, buybacks, and margin discipline to drive EPS gains. ZWS, by contrast, grew core sales by 8% with organic momentum accelerating into year-end — a reflection of a more narrowly focused portfolio levered to non-residential construction and water infrastructure spending patterns that remain broadly positive.
From a profitability perspective, both companies posted impressive adjusted EBITDA margins in the 26% range during 2025. ITW's 26.3% operating margin reflects the power of its diversified business model and relentless cost discipline, while ZWS's 26.1% adjusted EBITDA margin demonstrates that a mid-cap specialist can rival the efficiency of an industrial giant. On the capital allocation front, ITW's $1.5 billion annual buyback program and 62-year dividend growth streak appeal strongly to income-oriented investors. ZWS, while smaller in absolute capital returned, has meaningfully accelerated shareholder returns — raising dividends by 22%, repurchasing 3.8% of shares outstanding during 2025, and maintaining a fortress balance sheet with 0.4x net leverage.
Risk exposure differs markedly. ITW's seven-segment structure provides natural diversification across cyclical and defensive end-markets alike, making it relatively resilient in varied economic conditions. ZWS is more concentrated in non-residential construction markets and tariff-sensitive supply chains, although its specification-driven product portfolio and growing exposure to sustainability-linked water demand offer distinct counterbalances. Both companies face tariff-related cost pressures, but ZWS's more active supply chain restructuring — targeting a reduction in China-sourced materials to below 2-3% of cost of goods sold by end of 2026 — reflects a more proactive mitigation approach given its relatively higher exposure.
Tickeron AI Verdict
Based on observable trend consistency, relative momentum, and catalyst positioning, Tickeron's AI-driven analysis would likely tilt in favor of ZWS for growth-oriented scenarios, while favoring ITW for stability and income-focused strategies. ZWS has demonstrated superior organic revenue momentum — core sales growth of 8-10% compared to ITW's flat-to-low-single-digit organic trajectory — and its end-market catalysts around water infrastructure and institutional construction appear more secular in nature. However, ITW's margin consistency, capital return firepower, and diversified resilience make it a formidable candidate for risk-adjusted outperformance in uncertain macro environments. The probabilistic edge, at the current juncture, may lean toward ZWS for those prioritizing growth and toward ITW for those prioritizing capital preservation and dividend reliability. Neither stock presents a clearly inferior case — the AI's preference ultimately hinges on which factor set the prevailing market regime rewards.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ITW is a StrongBuy and ZWS is a StrongBuy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ITW’s FA Score shows that 2 FA rating(s) are green whileZWS’s FA Score has 0 green FA rating(s).
- ITW’s FA Score: 2 green, 3 red.
- ZWS’s FA Score: 0 green, 5 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ITW’s TA Score shows that 5 TA indicator(s) are bullish while ZWS’s TA Score has 5 bullish TA indicator(s).
- ITW’s TA Score: 5 bullish, 5 bearish.
- ZWS’s TA Score: 5 bullish, 4 bearish.
Price Growth
ITW (@Industrial Machinery) experienced а -2.14% price change this week, while ZWS (@Industrial Specialties) price change was -0.27% for the same time period.
The average weekly price growth across all stocks in the @Industrial Machinery industry was -1.71%. For the same industry, the average monthly price growth was -9.60%, and the average quarterly price growth was -6.22%.
The average weekly price growth across all stocks in the @Industrial Specialties industry was -5.45%. For the same industry, the average monthly price growth was -11.24%, and the average quarterly price growth was -15.48%.
Reported Earning Dates
ITW is expected to report earnings on Jul 28, 2026.
ZWS is expected to report earnings on Jul 28, 2026.
Industries' Descriptions
@Industrial Machinery (-1.71% weekly)The industry makes and maintains machines for consumers, the industry, and most other companies. While it has traditionally been categorized as heavy industry, some smaller companies are also branching into the light category. The industry is pivotal in providing the equipment for production in businesses like agriculture, mining, industry and construction, gas, electricity and water utilities. It also supplies supporting equipment for almost all sectors of the economy, such as equipment for heating, and air conditioning of buildings. Illinois Tool Works Inc., Parker-Hannifin Corporation and Rockwell Automation Inc are some of the major U.S. companies operating in this industry.
@Industrial Specialties (-5.45% weekly)Companies in the industrial specialties industry process basic materials and minerals into various specialty products, such as flat and safety glass, fire retardant products, paints and coatings. Examples of companies operating in this industry are Sherwin-Williams Company, PPG Industries, Inc. and RPM International Inc.
| ITW | ZWS | ITW / ZWS | |
| Capitalization | 79.7B | 7.92B | 1,006% |
| EBITDA | 4.74B | 392M | 1,208% |
| Gain YTD | 13.824 | 4.258 | 325% |
| P/E Ratio | 25.71 | 39.23 | 66% |
| Revenue | 16.2B | 1.74B | 931% |
| Total Cash | N/A | 274M | - |
| Total Debt | 9.15B | 552M | 1,657% |
ITW | ZWS | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 27 | 13 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 20 Undervalued | 58 Fair valued | |
PROFIT vs RISK RATING 1..100 | 39 | 34 | |
SMR RATING 1..100 | 12 | 62 | |
PRICE GROWTH RATING 1..100 | 37 | 56 | |
P/E GROWTH RATING 1..100 | 35 | 46 | |
SEASONALITY SCORE 1..100 | 50 | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ITW's Valuation (20) in the Industrial Machinery industry is somewhat better than the same rating for ZWS (58). This means that ITW’s stock grew somewhat faster than ZWS’s over the last 12 months.
ZWS's Profit vs Risk Rating (34) in the Industrial Machinery industry is in the same range as ITW (39). This means that ZWS’s stock grew similarly to ITW’s over the last 12 months.
ITW's SMR Rating (12) in the Industrial Machinery industry is somewhat better than the same rating for ZWS (62). This means that ITW’s stock grew somewhat faster than ZWS’s over the last 12 months.
ITW's Price Growth Rating (37) in the Industrial Machinery industry is in the same range as ZWS (56). This means that ITW’s stock grew similarly to ZWS’s over the last 12 months.
ITW's P/E Growth Rating (35) in the Industrial Machinery industry is in the same range as ZWS (46). This means that ITW’s stock grew similarly to ZWS’s over the last 12 months.
| ITW | ZWS | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 32% | N/A |
| Stochastic ODDS (%) | 2 days ago 45% | 2 days ago 65% |
| Momentum ODDS (%) | 2 days ago 59% | 2 days ago 67% |
| MACD ODDS (%) | 2 days ago 40% | 2 days ago 64% |
| TrendWeek ODDS (%) | 2 days ago 46% | 2 days ago 57% |
| TrendMonth ODDS (%) | 2 days ago 50% | 2 days ago 63% |
| Advances ODDS (%) | 2 days ago 51% | 2 days ago 63% |
| Declines ODDS (%) | 5 days ago 40% | 16 days ago 59% |
| BollingerBands ODDS (%) | 2 days ago 40% | 2 days ago 76% |
| Aroon ODDS (%) | 2 days ago 39% | 2 days ago 62% |
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ITW and
Correlation & Price change
A.I.dvisor indicates that over the last year, ITW has been closely correlated with GGG. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ITW jumps, then GGG could also see price increases.