Why Josh Brown Thinks Illinois Tool Works is the Top Long-Term Investment

In recent conversations around the stock market, Illinois Tool Works (ITW) has emerged as a name that’s been capturing attention. This comes as no surprise, given the ringing endorsement from renowned investor Josh Brown who highlighted ITW as not only a promising stock but a long-term hold, during a recent CNBC interview. According to TradingView, his insights provide a foundation for an investment strategy that looks beyond the next few quarters.

The Dividend King

Illinois Tool Works thrives as a dividend king, a title reserved for select companies demonstrating consistent dividend growth for over 50 years. As Josh Brown points out, such a record points to firm control over business operations and financial flows. The company’s dividend growth paints an appealing picture for those who value quality and compounding over immediate income. ITW presents an attractive, stable option for investors willing to play the long game.

Technical Indicators Affirm Growth

Brown identified a bullish technical setup forming in Illinois Tool Works. Specifically, he points out the golden cross—a scenario where the 50-day moving average surpasses the 200-day moving average—indicating that buyers are driving the momentum. Although the stock has room to grow, particularly approaching the elusive \(270-\)275 range, this setup provides a foundation for potential price breaks.

Distinguishing Dividend Growth and Income

One of the critical highlights from Josh Brown’s analysis is the distinction between dividend growth and dividend income. Despite ITW’s currently modest dividend yield of 2.46%, the constant increase over decades allows it to thrive as a beacon of resilience and financial discipline. Investors, especially those focused on long-term viability and consistent growth, may find ITW suitable for their portfolios.

Market Ratings and Projections

While Brown exudes optimism about ITW, Wall Street’s current stance is more guarded. With a consensus rating of “hold”, analysts have set a mean target price that aligns closely with the stock’s current price. Such market sentiments suggest waiting for additional triggers before a major price surge, but as Brown articulates, the strategy for long-term investors may not adhere strictly to short-term market ratings.

In the end, Brown’s endorsement of ITW shines as a testament to the company’s enduring potential and quality investment merits. Whether ITW will break out or maintain a “hold” rating, the company sits comfortably at the intersection of stability and opportunity, marking it as a noteworthy contender for investment consideration.