3M Company (MMM) Buy or Sell Stock Guide
The analysis below may be helpful to you if you have any of the following questions about MMM stock:
- Is MMM a buy or a sell?
- Should I sell or hold MMM stock today?
- Is MMM a good buy / a good investment?
- What are MMM analyst opinions, recommendations, ratings?
Here are MMM stock buy reasons/signals:
1. 3M has a long history of returning capital to shareholders, having paid dividends without interruption for 100 years and recently announcing accelerated rates of dividend growth and share buybacks.
2. 3M generates strong profitability with only modest capital intensity. The firm has enjoyed ROICs (including goodwill) north of our estimated cost of capital over the past decade, even during the recent recession.
3. Consumables represent about 50% of 3M's product portfolio, giving the company healthy profitability and less exposure to the volatile industrial capital spending cycle.
4. MMM profitability is improving. The YoY profit margin change was 0.81pp.
5. MMM forward dividend yield is 1.99%, higher than the industry (0.68%) and sector (0.83%) forward dividend yields.
Here are MMM stock sell reasons/signals:
1. 3M's participation in many end markets is both a help and a hindrance. Diversification mitigates risk, but also makes it difficult to grow at a rate different from global GDP.
2. 3M may be increasing leverage and cash outflows at the top of a cycle, a decision that may prove painful and limiting if global economic growth materially slows.
3. Growing exposure to emerging markets increases currency risk and could heighten competition from foreign competitors over time. This could make it difficult for 3M to gain share at historical levels of profitability.
4. MMM stock price ($237.95) is close to the 52-week high ($243.00). Perhaps now is a good time to sell?
5. MMM quarterly revenue growth was 1.90%, lower than the industry and sector average revenue growth (5.96% and 5.59%, respectively).
6. MMM Price/Book ratio is 12.52, and it’s high compared to its industry peers’ P/B ratios.
7. MMM average analyst price target ($222.46) is below its current price ($237.95).
What are your thoughts on MMM?
If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.