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(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — You’ve heard of “Dividend Aristocrats,” the small group of publicly traded companies in the S & P 500 that have raised their dividend for 25 consecutive years. There are only 69 of these in the index right now. What you may not have heard about are the “Dividend Kings.” These are stocks that have raised their dividend for over 50 consecutive years. This is extremely rarified air. There are just 55 Dividend Kings, and most of them are Midwestern industrial companies. Today we’re going to shine the spotlight on one of them. Sean, take it away… Best Stock Spotlight: Illinois Tool Works, Inc. (ITW) On the list since: 8/13/2025 Sean — We’ve been spending a lot of time discussing AI, semiconductors and other growth-oriented stocks since those have been leading the market lately. However, there is some rotation going on underneath the surface. Over the past month, value and shareholder yield have been the best performing factors: Illinois Tool Works was recently added to the list, and the chart looks promising: This is very clearly a value stock. ITW is an industrial that makes engineered components, equipment and consumables used in everyday products and industrial applications. Its businesses span automotive parts, packaging, food equipment, welding and construction. ITW’s recent positive performance is partially due to better-than-expected earnings reported in July. ITW beat on the top and bottom lines, operating margin improved 10bps year-over-year to 26.3%. The company also spent $375 million of its $449 million in free cash flow on share repurchases. More importantly, management raised its full-year earnings outlook and maintained its revenue guidance. The stock trades at a 23x trailing PE, cheaper than its industry average and in line with the company’s 10 year historical median PE. ITW expects 3% year-over-year revenue growth next quarter and 2.5% year over year EPS growth. ITW stands out as a high-quality value play in a market quietly shifting out of growth names thus far in August. With diversified end markets, margin expansion, strong free cash flow deployment and raised guidance, the company is delivering at a reasonable valuation versus history and peers, which will bode well if we get a short term swing out of growth and momentum. Risk management Josh — It’s not perfect, but ITW is in the process of breaking out of what’s known as a symmetrical triangle. This could also be interpreted as an ascending triangle, depending on how liberal the trader wants to be with the highs in the chart. And ascending triangles are bullish. Think about the psychology among the buyers and sellers of the stock. As the price drops, the buyers are coming in at higher and higher lows to snap up more shares. Eventually, the price hits a decision point as we’re seeing in ITW now. Does it break higher or lower? We’re about to find out which way it’s going to break, but the higher lows we’ve been seeing to form the lower trendline of the ascending triangle are favoring the longs. Too early to tell, but I like it. In either case, you’re on the verge of a moving average crossover with the 50-day breaking above the 200-day this week. Purists will want to await a “true” breakout above $280 before taking this trade. More aggressive traders might want to anticipate and buy the golden cross. In either case, should ITW be able to clear the overhead resistance dating back to last fall, the stock should work. The $240 level served as support all summer long. I like that for a stop loss. Remember – traders rarely stick around long enough to collect the yields of the Aristocrats and Kings, so you may want to think about this one as more of a long-term dividend holding too. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC” TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
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