- 3 Profitable Stocks with Open Questions
May 12, 2026
Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here are three profitable companies to steer clear of and a few better alternatives.
Restaurant Brands (QSR)
Trailing 12-Month GAAP Operating Margin: 24.7%
Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.
Why Are We Hesitant About QSR?
Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its seven-year trend Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 1.6 percentage points Earnings growth over the last seven years fell short of the peer group average as its EPS only increased by 6% annually
Restaurant Brands is trading at $78.22 per share, or 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than QSR.
Watsco (WSO)
Trailing 12-Month GAAP Operating Margin: 9.9%
Originally a manufacturing company, Watsco (NYSE:WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies.
Why Are We Wary of WSO?
Sales were flat over the last two years, indicating it’s failed to expand this cycle Earnings per share fell by 3.7% annually over the last two years while its revenue was flat, partly because it diluted shareholders Waning returns on capital imply its previous profit engines are losing steam
At $429.10 per share, Watsco trades at 34x forward P/E. Check out our free in-depth research report to learn more about why WSO doesn’t pass our bar.
Illinois Tool Works (ITW)
Trailing 12-Month GAAP Operating Margin: 26.4%
Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE:ITW) manufactures engineered components and specialized equipment for numerous industries.
Why Do We Think Twice About ITW?
Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth Projected sales growth of 3.1% for the next 12 months suggests sluggish demand Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.1% annually
Illinois Tool Works’s stock price of $255.54 implies a valuation ratio of 22.9x forward P/E. To fully understand why you should be careful with ITW, check out our full research report (it’s free).
Story Continues
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- Illinois Tool Works Inc. declares $1.61 dividend
May 11, 2026
* Illinois Tool Works Inc. (ITW [https://seekingalpha.com/symbol/ITW]) declares $1.61/share quarterly dividend [https://seekingalpha.com/pr/20508037-itw-board-of-directors-declares-quarterly-dividend], in line with previous.
* Forward yield [https://seekingalpha.com/symbol/ITW/dividends/yield?source=news_bullet] 2.52%
* Payable July 10; for shareholders of record June 30; ex-div June 30.
* See ITW Dividend Scorecard, Yield Chart, & Dividend Growth. [https://seekingalpha.com/symbol/ITW/dividends?source=news_bullet]
MORE ON ILLINOIS TOOL WORKS INC.
* Illinois Tool Works: Tricky In 2026, I Say 'Hold' [https://seekingalpha.com/article/4897444-illinois-tool-works-tricky-in-2026-i-say-hold]
* Illinois Tool Works Inc. 2026 Q1 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4897267-illinois-tool-works-inc-2026-q1-results-earnings-call-presentation]
* Illinois Tool Works Inc. (ITW) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4896745-illinois-tool-works-inc-itw-q1-2026-earnings-call-transcript]
* ITW projects $11.10-$11.50 2026 GAAP EPS while maintaining 1%-3% organic growth outlook [https://seekingalpha.com/news/4583131-itw-projects-11_10-11_50-2026-gaap-eps-while-maintaining-1-percentminus-3-percent-organic]
* Illinois Tool Works Inc. GAAP EPS of $2.66 beats by $0.10, revenue of $4.02B beats by $10M [https://seekingalpha.com/news/4582744-illinois-tool-works-inc-gaap-eps-of-2_66-beats-by-0_10-revenue-of-4_02b-beats-by-10m]
- ITW Board of Directors Declares Quarterly Dividend
May 8, 2026
Illinois Tool Works Inc.
GLENVIEW, Ill., May 08, 2026 (GLOBE NEWSWIRE) -- The Board of Directors of Illinois Tool Works Inc. (NYSE: ITW) declared a dividend on the company's common stock of $1.61 per share for the second quarter of 2026. The dividend equates to $6.44 per share on a full-year basis. The dividend will be paid on July 10, 2026 to shareholders of record as of June 30, 2026.
About Illinois Tool Works
ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16 billion in 2025. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 43,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com.
Investor Relations & Media Contact:
Erin Linnihan
Tel: 224.661.7431
investorrelations@itw.com | mediarelations@itw.com
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- ITW Board of Directors Declares Quarterly Dividend
May 8, 2026
GLENVIEW, Ill., May 08, 2026 (GLOBE NEWSWIRE) -- The Board of Directors of Illinois Tool Works Inc. (NYSE: ITW) declared a dividend on the company's common stock of $1.61 per share for the second quarter of 2026. The dividend equates to $6.44 per share on a full-year basis. The dividend will be paid on July 10, 2026 to shareholders of record as of June 30, 2026.
About Illinois Tool Works
ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16 billion in 2025. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 43,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com.
Investor Relations & Media Contact:
Erin Linnihan
Tel: 224.661.7431
investorrelations@itw.com | mediarelations@itw.com
- ITW Board of Directors Declares Quarterly Dividend
May 8, 2026 · globenewswire.com
GLENVIEW, Ill., May 08, 2026 (GLOBE NEWSWIRE) -- The Board of Directors of Illinois Tool Works Inc. (NYSE: ITW) declared a dividend on the company's common stock of $1.61 per share for the second quarter of 2026. The dividend equates to $6.44 per share on a full-year basis. The dividend will be paid on July 10, 2026 to shareholders of record as of June 30, 2026.
- ITW BOARD OF DIRECTORS DECLARES QUARTERLY DIVIDEND
May 8, 2026
GLENVIEW, ILL., MAY 08, 2026 (GLOBE NEWSWIRE) -- THE BOARD OF DIRECTORS OF ILLINOIS TOOL WORKS INC. (NYSE: ITW) DECLARED A DIVIDEND ON THE COMPANY'S COMMON STOCK OF $1.61 PER SHARE FOR THE SECOND QUARTER OF 2026. THE DIVIDEND EQUATES TO $6.44 PER SHARE ON A FULL-YEAR BASIS. THE DIVIDEND WILL BE PAID ON JULY 10, 2026 TO SHAREHOLDERS OF RECORD AS OF JUNE 30, 2026.
- The Middleby Sees Strong Q1 Sales, Raises 2026 Outlook
May 7, 2026
By Karen Roman
The Middleby Corp. (Nasdaq: MIDD) said net sales increased 15 percent in the first quarter to $840 million compared to the year prior.
Adjusted EBITDA was $181 million in the quarter compared to $161 million a ;year earlier, while adjusted EPS was $2.16 vs $1.87 the prior year, surpassing analyst estimates, the company stated.
Organic sales growth grew more than 8 percent in commercial food service and 25 percent in food processing. The Middleby raised its 2026 outlook and expects revenue growth above 4-6 percent in commercial food service and above 4-7 percent in food processing, it said.
“In addition to our strong segment-level results, our aggressive capital allocation strategy continues, with over $520 million deployed in share repurchases so far in 2026, reducing our share count by approximately 7 percent, building on the 9percent reduction achieved in 2025,” said Tim FitzGerald, The Middleby CEO.
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- Illinois Tool Works Inc. (NYSE:ITW) First-Quarter Results: Here's What Analysts Are Forecasting For This Year
May 3, 2026
Shareholders might have noticed that Illinois Tool Works Inc. (NYSE:ITW) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.1% to US$255 in the past week. The result was positive overall - although revenues of US$4.0b were in line with what the analysts predicted, Illinois Tool Works surprised by delivering a statutory profit of US$2.66 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.NYSE:ITW Earnings and Revenue Growth May 3rd 2026
After the latest results, the 15 analysts covering Illinois Tool Works are now predicting revenues of US$16.6b in 2026. If met, this would reflect a satisfactory 2.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 3.9% to US$11.30. Before this earnings report, the analysts had been forecasting revenues of US$16.6b and earnings per share (EPS) of US$11.27 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Check out our latest analysis for Illinois Tool Works
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$276. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Illinois Tool Works at US$310 per share, while the most bearish prices it at US$219. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 3.1% growth on an annualised basis. That is in line with its 2.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.0% per year. So although Illinois Tool Works is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
Story Continues
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Illinois Tool Works' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$276, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Illinois Tool Works. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Illinois Tool Works analysts - going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Illinois Tool Works you should know about.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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- ITW Q1 Deep Dive: CapEx Segments Strengthen as Consumer Markets Lag, Guidance Maintained
May 2, 2026
Manufacturing company Illinois Tool Works (NYSE:ITW) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 4.6% year on year to $4.02 billion. Its GAAP profit of $2.66 per share was 3.6% above analysts’ consensus estimates.
Is now the time to buy ITW? Find out in our full research report (it’s free).
Illinois Tool Works (ITW) Q1 CY2026 Highlights:
Revenue: $4.02 billion vs analyst estimates of $4.01 billion (4.6% year-on-year growth, in line) EPS (GAAP): $2.66 vs analyst estimates of $2.56 (3.6% beat) Adjusted Operating Income: $1.02 billion vs analyst estimates of $1.03 billion (25.4% margin, 1.1% miss) EPS (GAAP) guidance for the full year is $11.30 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 25.4%, in line with the same quarter last year Organic Revenue was flat year on year (miss) Market Capitalization: $74.33 billion
StockStory’s Take
Illinois Tool Works began 2026 with financial results that met revenue expectations and modestly exceeded profit forecasts, but the market reacted negatively as concerns lingered about underlying growth. Management attributed the quarter’s performance to robust demand in capital expenditure-driven segments, particularly Welding and Test & Measurement, which offset softer results in consumer-oriented businesses. CEO Christopher O’Herlihy noted, "We continued to outperform our underlying end markets, delivering revenue growth of 5% and a 12% increase in GAAP EPS to $2.66," while acknowledging that consumer-facing segments faced ongoing challenges.
Looking ahead, Illinois Tool Works’ outlook is anchored on further progress in its Enterprise Initiatives and continued momentum in CapEx-related segments. The company anticipates all seven business segments to deliver positive organic growth and margin expansion in 2026, with management emphasizing new product launches and customer-backed innovation as key drivers. CFO Michael Larsen cautioned that while demand trends are encouraging, guidance is based on current run rates, stating, "We are more confident in our organic growth guidance of 1% to 3% today than we were on the last call."
Key Insights from Management’s Remarks
Management cited strength in CapEx-driven segments, margin expansion from operational initiatives, and new product pipelines as primary drivers for the latest quarter.
CapEx Segment Momentum: Test & Measurement and Welding segments saw strong order activity and outperformed internal expectations, supported by continued investment in capacity and new products. Management called out semiconductor-related demand as a growth highlight within Test & Measurement. Enterprise Initiatives Drive Margins: The company’s margin improvement was led by its strategic sourcing and product line simplification programs, collectively referred to as Enterprise Initiatives. These efforts contributed 120 basis points to operating margin, helping absorb weaker volumes in consumer-facing segments. Consumer-Facing Weakness: Despite a challenging environment, segments like Automotive and Construction managed to outpace their underlying end markets, but overall organic growth in consumer-oriented businesses remained subdued. Management highlighted pockets of strength, such as automotive aftermarket, but acknowledged the headwinds facing retail and institutional channels. Food Equipment Mixed Results: Food Equipment’s performance was weighed down by a slow start in institutional markets, especially education, though restaurant-related sales and service operations showed improvement as the quarter progressed. Management expects sequential improvement in both growth and margins for this segment as the year continues. Customer-Backed Innovation (CBI): The pipeline of new products, driven by customer-identified needs, continues to expand across all divisions. Patent filings—a leading indicator for future CBI—rose further, and management expects CBI to contribute more meaningfully to organic growth in coming years.
Story Continues
Drivers of Future Performance
Illinois Tool Works expects CapEx-related momentum, margin improvements, and a steady pipeline of customer-driven products to shape its 2026 performance.
CapEx and Semi Recovery: Management pointed to ongoing strength in capital expenditure-driven markets, especially semiconductors, as a primary growth engine. Increased fab utilization and strong order activity support a sustainable recovery, with the company aiming to outperform broader market growth rates in these segments. Margin Expansion Initiatives: Enterprise Initiatives, such as strategic sourcing and product line simplification, are projected to deliver approximately 100 basis points of margin improvement for the year. This operational discipline is expected to counterbalance any persistent softness in consumer-facing businesses. Innovation Pipeline and Pricing: The company is focused on accelerating its customer-backed innovation efforts, targeting a 3% or greater contribution to revenue from new products by 2030. Management also expects modest pricing tailwinds in the second half of the year to help offset inflationary pressures and support overall profitability.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will track (1) whether strong demand in CapEx-driven segments can persist and broaden to consumer-facing businesses, (2) sequential margin improvement across all seven business units as Enterprise Initiatives ramp up, and (3) evidence that customer-backed innovation is translating into higher organic growth rates. We will also monitor the impact of pricing actions and product launches on profitability.
Illinois Tool Works currently trades at $257.70, down from $265.67 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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- Illinois Tool Surpasses Q1 Earnings Estimates, Updates 2026 View
Apr 30, 2026
Illinois Tool Works Inc. ITW reported first-quarter 2026 adjusted earnings of $2.66 per share, which surpassed the Zacks Consensus Estimate of $2.55. Earnings increased 12% year over year.
Illinois Tool’s revenues of $4.02 billion beat the consensus estimate of $4.00 billion. The top line increased 5% year over year, driven by a favorable foreign currency translation of 3.9%. Organic sales increased 0.4% in the quarter, while acquisitions had a favorable impact of 0.3%.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were $715 million, up 9.6% year over year. Our estimate for segmental revenues was $681.8 million. Revenues from Automotive Original Equipment Manufacturer increased 4.4% year over year to $820 million. Our estimate for segmental revenues was $812.1 million.
Food Equipment generated revenues of $637 million, up 1.7% year over year. Our estimate for segmental revenues was $651.0 million. Welding revenues were $507 million, up 7.3% year over year. Our estimate for segmental revenues was $497.3 million.
Construction Products’ revenues were up 3.4% year over year to $458 million. Our estimate for segmental revenues was $441.7 million. Revenues of $431 million from Specialty Products reflected a decrease of 1% year over year. Our estimate for segmental revenues was $449.6 million. Polymers & Fluids’ revenues of $452 million increased 5.4% year over year. Our estimate for segmental revenues was $446.3 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote
Illinois Tool’s Margin Profile
Illinois Tool’s cost of sales increased 4.4% year over year to $2.26 billion. Selling, administrative and research and development expenses increased 2.3% year over year to $722 million. The operating margin was 25.4%, up 60 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the first quarter, Illinois Tool had cash and equivalents of $827 million compared with $851 million at the end of December 2025. Long-term debt was $6.60 billion compared with $6.68 billion at the end of December 2025.
In the first three months of 2026, Illinois Tool generated net cash of $623 million from operating activities, reflecting an increase of 5.2% from the year-ago number. Capital spending on the purchase of plant and equipment was $95 million, down 1% year over year. Free cash flow was $528 million, up 6.9% year over year.
Story Continues
Illinois Tool’s 2026 Guidance
Illinois Tool updated its full-year 2026 financial guidance. ITW now expects earnings to be in the range of $11.10-$11.50 per share compared with $11.00 - $11.40 expected earlier. Revenues are expected to increase 2-4% while organic revenues are anticipated to rise 1-3%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.
Illinois Tool projects the free cash flow to be more than 100% of its net income. The company expects to repurchase about $1.5 billion worth of shares. The effective tax rate is expected to be 23-24%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Graco Inc. GGG posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $528.3 million.
Stanley Black & Decker, Inc. SWK reported first-quarter 2026 adjusted earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 6.7% year over year.
Stanley Black’s net sales of $3.85 billion beat the consensus estimate of $3.74 billion. The top line increased 2.7% from the year-ago quarter.
Ingersoll Rand Inc. IR reported first-quarter 2026 adjusted earnings of 77 cents per share, which surpassed the Zacks Consensus Estimate of 74 cents. The bottom line increased 7% year over year.
Total revenues of $1.85 billion beat the consensus estimate of $1.83 billion. The top line increased 7.6% year over year.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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