On Friday, August 7, 2026, the Board of Directors of Illinois Tool Works Inc. (ITW) announced a quarterly dividend increase from $1.61 to $1.72 per share. The dividend will be payable on October 9, 2026, to shareholders of record as of September 30, 2026. This represents a 6.83% increase over the previous quarterly dividend.
In addition to the dividend increase, ITW announced that its Board of Directors approved a new authorization allowing the company to repurchase up to $6 billion of its common stock, further demonstrating its commitment to returning capital to shareholders.
Current Dividend Yield and Income Impact
At yesterday’s closing price of $294.52, this increase brings ITW’s forward dividend yield to approximately 2.34%.
As an owner of 20 shares of Illinois Tool Works, this dividend increase adds $6.56 to my projected annual net dividend income.
Long-Term Dividend Growth Track Record
Illinois Tool Works is a Dividend Champion with an impressive 51-year streak of consecutive dividend increases. According to Dividend Champions data, its dividend growth rates are:
- 1-year: 7.2%
- 3-year: 7.1%
- 5-year: 7.0%
- 10-year: 11.8%
This recent dividend increase marks the ninth consecutive raise I’ve received from ITW since initiating my position in August 2018. Over this period, the quarterly dividend has grown steadily from $0.78 to $1.72 per share, representing an impressive 120.5% increase.
Commentary
I was expecting an increase of around 6%, so this announcement came in slightly above my expectations, and I’m happy to accept it.
ITW has continued to deliver solid dividend growth while also returning significant amounts of capital to shareholders through share repurchases. The new $6 billion authorization is another positive for long-term shareholders.
At the time of writing, ITW represents approximately 0.56% of my portfolio and contributes about 0.36% of my projected annual dividend income. Following this increase, my yield on cost stands at 5.32%.
Quick Valuation Take
At the current share price, ITW appears reasonably valued, although it is not particularly cheap. The relatively modest dividend yield reflects the company's long history of dividend growth and strong shareholder returns.
The new $6 billion share repurchase authorization could also support per-share earnings and dividend growth over the longer term, provided the company repurchases shares at attractive valuations.
Dividend Safety and Outlook
ITW's dividend remains well supported by its strong cash generation, diversified industrial business, and disciplined capital allocation strategy. The company's 51-year dividend growth streak is particularly impressive and demonstrates its ability to maintain and grow shareholder distributions through multiple economic cycles.
With dividend growth around the 7% range in recent years, I expect ITW to continue delivering solid mid-single-digit to high-single-digit dividend growth over time. Combined with share repurchases, this should provide a compelling total-return profile for long-term investors.
Final Thoughts
This was a solid dividend increase that came in slightly above my expectations. A 6.83% raise is a very good result for a mature industrial company, especially when combined with the newly authorized $6 billion share repurchase program.
ITW continues to provide the combination I look for in a long-term dividend holding: a long dividend growth streak, consistent dividend increases, strong cash generation, and shareholder-friendly capital allocation.
For me, this remains a dependable dividend growth holding, and I’m happy to continue collecting and compounding the growing income.
Summary of 2026 Dividend Increases / Cuts
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Full Disclosure: Long ITW
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