What happened

Shares of industrial components manufacturer Illinois Tool Works (NYSE:ITW) rose 7.6% in September, continuing a growth trend that has caused shares to soar 160% over the last five years.

As sometimes happens, the stock took off for no apparent reason, but some of the company's recent decisions provide some clues as to why shares were ripe for outperformance. 

Wrenches, copper pipes, and pipe fittings atop a set of plans.

Illinois Tool Works has outperformed the broader stock market regularly, and September was no exception. Image source: Getty Images.

So what

On August 4, the company announced it was upping its quarterly dividend by 20%, from $0.65 per share to $0.78 per share. You'd think this would be considered a good thing, but the stock market apparently disagreed, sending shares down about 3% over the next several days, where they continued to languish into September.

But suddenly, on Sept. 4, the stock started to rise quickly, moving from below $137/share all the way up to $148/share in just two weeks. It's possible that because of the August stock drop, shares finally looked too tempting to pass up for investors who piled in to buy prior to the ex-dividend date of Sept. 29. It's also possible that investors simply were impressed with the company's consistent outperformance.

Now what

Whatever the reason, Illinois Tool Works handily outperformed the broader market in September, as it has done fairly consistently for years. With shares at all-time highs, though, it's natural to wonder whether the stock can continue its impressive run. The good news is that the company's P/E ratio, on a trailing 12-month basis, is comfortably in line with those of its industrial conglomerate peers. This month's performance shouldn't discourage investors from taking a serious look at this consistent outperformer.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.