Last update 5/27/25
ITT Inc. (NYSE: ITT) is a diversified industrial manufacturer with a strong footprint in motion technologies, industrial processes, and connective solutions. With a disciplined leadership team and a focus on innovation, ITT has built a consistent track record of operational execution and financial performance. Its product lines serve essential sectors including transportation, defense, energy, and industrial automation.
In recent quarters, ITT has demonstrated stable revenue, expanding margins, and healthy free cash flow. Supported by a conservative payout ratio and strategic share repurchases, the company continues to return capital to shareholders. Analysts have responded with upward revisions in price targets, reflecting confidence in ITT’s long-term positioning.
Recent Events
Looking at the most recent quarter, ITT delivered fairly steady results. Revenue for the trailing twelve months reached $3.63 billion, with net income of just over $515 million. Margins are holding up well—profit margin at 14.18% and operating margin at 17.24%—which is impressive in the current economic backdrop.
Earnings per share for the same period came in at $6.28. That’s a slight year-over-year decline, but not alarming considering the pressure many industrials are facing right now. What really stands out is the cash flow story. Operating cash flow totaled $617.8 million, and after accounting for capital expenditures and other obligations, the company still generated $414.9 million in levered free cash flow.
With almost $440 million in cash on the balance sheet and a modest $831 million in total debt, ITT is keeping its financial house in order. That sets the stage for reliable dividend payments and continued shareholder returns through stock buybacks, without taking on unnecessary risk.
Key Dividend Metrics
🟢 Forward Dividend Yield: 0.95%
🟢 Trailing Dividend Yield: 0.88%
🟢 5-Year Average Dividend Yield: 1.03%
🟢 Forward Annual Dividend Rate: $1.40
🟢 Payout Ratio: 20.83%
🟢 Ex-Dividend Date: June 2, 2025
🟢 Payment Date: June 30, 2025
ITT’s payout ratio is comfortably low, giving it room to keep growing dividends even if earnings hit a bump. It’s a conservative approach, and for dividend investors, that’s often what you want—especially when paired with a clean balance sheet and consistent cash generation.
Dividend Overview
The dividend yield on ITT won’t jump off the page. At just under 1%, it’s more of a quiet contributor than a headline act. But that doesn’t tell the full story. What matters more is the company’s approach—prioritizing steady increases over chasing a high yield. It’s a strategy that aligns with a broader total return mindset, where growth and discipline work hand in hand.
Management hasn’t stretched to keep up with peers on yield, and that restraint is actually a positive. By holding the payout ratio below 25%, ITT maintains the flexibility to reinvest in the business, while still returning capital to shareholders. It’s not chasing yield—it’s earning it.
From a profitability standpoint, this approach makes sense. With a return on equity of 19.3% and operating margins holding strong, the company is producing quality earnings. Add in a relatively low beta of 1.36, and ITT stands out as a stable, cash-generative industrial that isn’t trying to do too much, too fast.
Dividend Growth and Safety
Dividend growth is where ITT starts to shine. The forward dividend of $1.40 is a step up from $1.31 in the trailing twelve months, which marks nearly a 7% increase. It’s not flashy, but it’s consistent—and that’s often more important in the long run.
Free cash flow covers the dividend several times over. With just around $110 million in annual dividend obligations against $415 million in levered free cash flow, there’s a solid cushion. That margin ensures the dividend isn’t just safe—it’s got room to grow, even in less-than-ideal market conditions.
The company also remains conservative with its debt. A total debt to equity ratio under 30% and an enterprise value to EBITDA multiple in the mid-teens show a company that’s not overextending itself. That kind of balance sheet strength is a key factor in maintaining a reliable dividend during cycles of economic stress.
ITT’s pattern of annual increases points to a disciplined long-term outlook. This is a company that doesn’t raise its dividend because it has to—it does it because it can, and because it fits the overall capital strategy.
While the yield is modest, the combination of safety, growth potential, and a shareholder-aligned philosophy makes ITT a compelling piece of an income-oriented portfolio. It’s not about chasing returns. It’s about building them, year after year.
Cash Flow Statement
ITT has posted a solid showing on the cash flow front over the trailing twelve months. Operating cash flow reached $617.8 million, continuing an upward trend from $562.1 million in the prior year. This strength in core operations reflects steady earnings quality and working capital management. After subtracting $133 million in capital expenditures, the company generated $484.8 million in free cash flow, a healthy increase from previous years and a strong indicator of financial flexibility.
On the investing side, outflows totaled $423.3 million, slightly improved compared to the heavy $817.9 million in the previous year, which included significant spending—likely acquisitions or capacity investments. Financing cash flow came in at a negative $168.4 million, reflecting a continuation of debt repayments and a step-up in share repurchases, which hit $204.5 million. Despite these outflows, ITT maintained a strong cash position with $449.8 million on hand. This steady cash generation combined with disciplined capital allocation reinforces the company’s ability to sustain dividends while funding growth.
Analyst Ratings
🟢 ITT Inc. has recently attracted positive attention from analysts, with several firms raising their price targets in response to the company’s strong performance and strategic initiatives. 📈 Bank of America increased its price target from $145 to $170, citing ITT’s superior execution and above-peer organic growth. 📊 TD Cowen also raised its target to $170, pointing to the company’s well-articulated long-term strategy and growth momentum. 📘 Stifel followed suit, lifting its price target to $171 while maintaining a Buy rating, underscoring confidence in ITT’s financial discipline and recent acquisition activity.
📌 The consensus among analysts reflects a broadly optimistic outlook, with the average 12-month price target landing at $165.50. That suggests an upside of around 12% from current levels. Across the board, price targets range from a low of $150 to a high of $177, showing a fairly tight band of expectations and a general agreement that ITT is executing well in a complex market environment.
🟡 That said, not everyone is leaning bullish. StockNews.com recently downgraded ITT from Buy to Hold, signaling a more cautious tone from some corners. Still, the dominant sentiment remains constructive, with most analysts continuing to support the stock based on its financial consistency, focused capital deployment, and sustained operational performance.
Earnings Report Summary
Solid Start to the Year
ITT Inc. got 2025 off to a steady start, with adjusted earnings per share landing at $1.45—right at the upper end of the guidance range. Reported EPS was slightly lower at $1.33, dipping by about 1% compared to last year, mainly due to higher tax and interest expenses. Revenue came in just over $900 million, roughly flat year-over-year, but in line with expectations. What stood out more was the strength in new orders, which grew 7% to hit $1 billion. That kind of order growth, especially in sectors like defense and industrial, helps paint a positive outlook for the months ahead.
Segment Performance: A Mixed Bag
Performance across ITT’s business segments was a bit of a mixed story. The Connect & Control Technologies group delivered a strong quarter, with revenue jumping nearly 27%, thanks to robust demand in defense and industrial connectors. On the flip side, the Motion Technologies segment took a hit, down around 12%, mostly due to weaker auto production in Europe and North America. The Industrial Process segment also saw a slight drop, largely due to timing issues on some pump shipments. Still, despite the pressure in a couple of spots, the company managed to grow its adjusted operating margin by 30 basis points to 17.4%. That’s a sign of disciplined cost control even when some parts of the business are lagging.
Cash Flow and Capital Returns
Cash generation was another bright spot. ITT pulled in $112 million from operating activities and ended the quarter with $77 million in free cash flow—well ahead of its preliminary estimates. With a strong cash position, the company returned nearly $129 million to shareholders through a mix of dividends and share repurchases. That kind of return, particularly early in the year, reinforces the company’s focus on rewarding shareholders without stretching its balance sheet.
Outlook Still on Track
As for the rest of the year, ITT didn’t make any changes to its guidance. The company still expects adjusted EPS in the range of $6.10 to $6.50 and revenue growth between 2% and 4%. Free cash flow is projected to come in somewhere between $450 million and $500 million. Leadership struck a confident tone on the earnings call, signaling that the company’s operational improvements and capital discipline should help it stay on course even if certain markets remain a bit choppy.
Overall, while the quarter wasn’t a blockbuster, it was solid and steady—something long-term investors can appreciate. ITT’s leadership appears focused on execution, and that approach continues to show up in the results.
Management Team
ITT Inc. is led by CEO and President Luca Savi, who has been guiding the company since 2019. Savi brings with him a strong operational mindset, honed during his previous role as Chief Operating Officer. His leadership has been focused on driving disciplined growth, expanding through strategic acquisitions, and sharpening the company’s efficiency across core operations.
Working alongside Savi is Emmanuel Caprais, the Chief Financial Officer, who steers ITT’s financial strategy and capital deployment. The broader executive team blends decades of experience from diverse industrial backgrounds, creating a leadership structure grounded in accountability and consistent improvement. The group works cohesively, prioritizing performance while remaining flexible enough to navigate shifting global dynamics.
Valuation and Stock Performance
As of late May 2025, ITT shares are trading around $147.35. The company carries a market cap of roughly $11.6 billion, placing it firmly in mid-cap territory within the broader industrial space. Over the past year, shares have ranged from a low of $105.64 to a high of $161.13. This movement reflects general market volatility and sector-specific cycles, yet ITT’s fundamentals have helped maintain investor confidence.
The stock currently trades at a trailing P/E ratio of 23.46. While not cheap, the valuation signals a market that recognizes ITT’s earnings potential and sees consistency in its delivery. The enterprise value to EBITDA ratio stands at approximately 14.5, a level that keeps the valuation in line with industry peers while leaving some headroom for expansion if the company continues to execute effectively.
Risks and Considerations
No industrial company operates without risk, and ITT is no exception. One of the company’s ongoing challenges is exposure to cyclical sectors such as energy, mining, and chemicals. Delays or cancellations in capital projects within these industries could directly impact order volumes and revenue.
With a global footprint, ITT is also sensitive to currency fluctuations. Exchange rate volatility can shift the value of both revenues and operating costs, occasionally leading to margin pressure, even when operational performance remains steady.
Another concern is the global supply chain environment. ITT, like many manufacturers, remains vulnerable to disruptions in sourcing materials or key components. While the company has adapted well to these issues in recent years, persistent or unexpected constraints could hinder its ability to meet demand on schedule or at favorable cost.
Competition within the industrial sector remains intense, particularly in segments where innovation and pricing power are critical. ITT must continue to invest in product development and customer solutions to maintain its edge, especially as newer players and technologies emerge in adjacent spaces.
Final Thoughts
ITT Inc. continues to show what disciplined execution and long-term planning can achieve in the industrial sector. The leadership team has kept the company focused and financially sound, with a strategy rooted in organic growth and operational improvement. While risks from the global market environment and industry-specific headwinds remain, the company’s strong balance sheet, cash flow profile, and clear direction offer stability and potential.
For investors with an eye on steady business models and shareholder-friendly management, ITT brings a combination of reliability and upside. It’s not a flashy stock, but it’s one that seems committed to doing the fundamentals right and rewarding those who stick with it.