Illinois Tool Works Inc (NYSE: ITW) has quietly outperformed in recent months, riding the wave of a broader rally in industrials.
But renowned investor Josh Brown believes this isn’t just a short-term trade – it’s a long-term hold.
In a recent CNBC interview, Brown dubbed ITW one of the “best stocks in the market,” citing its elite dividend status, technical setup, and business quality.
While the stock hasn’t fully broken out yet, Brown argues it deserves a spot on investors’ radars, especially those with a long-term horizon and an appetite for quality industrial names.
Why Brown sees Illinois Tool Works stock as a top pick
On “Halftime Report”, Josh Brown highlighted Illinois Tool Works’ status as a dividend king – a rare breed of companies that have raised their dividend every year for more than 50 years.
Only 55 companies in the S&P 500 index meet that threshold, and most are Midwestern industrials. ITW’s consistent dividend growth reflects deep control over its business, cash flows, and long-term strategy.
“When a company has paid for 25 years, much less 50, you know they have incredible control over their future,” Brown noted.
With a current dividend yield of 2.46%, ITW shares aren’t a high-income play, but it’s a dividend growth story – ideal for investors who prioritize quality and long-term compounding, he added.
Technicals suggest further upside in ITW shares
Brown also pointed to a bullish technical setup forming in Illinois Tool Works shares: a golden cross, where the 50-day moving average crosses above the 200-day.
This pattern is widely viewed as a signal that buyers are gaining control and momentum is shifting upward. “Clearly, the buyers are in control of the stock,” Brown told CNBC.
Note that ITW stock hasn’t quite broken out yet. According to Josh Brown, the bullish signal will pop around the $270-$275 level.
“You might have to wrestle with that level,” he said, “but I think it’ll break out.” For traders, he suggests waiting for confirmation. But for long-term investors, the setup already justifies an early entry.
Illinois Tool Works is a dividend growth story – not income
Finally, the famed investor emphasized the importance of distinguishing between dividend growth and dividend income.
With the S&P 500’s average yield around 1.4%, ITW’s 2.46% yield is modest – but it’s backed by decades of consistent increases.
“If you really need income, this isn’t where you find it,” Brown said. Instead, he views dividend aristocrats and kings as a quality screen – companies that have proven their resilience and capital discipline over time.
ITW fit that mold perfectly. “We like the stock right here,” Brown said. However, Wall Street firms do not particularly share his optimism on Illinois Tool Works stock.
The consensus rating on ITW shares currently sits at “hold” only, and the mean target of $261 is roughly in line with the price at which it’s already trading on Thursday.
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