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3M Company

3M Company’s (NYSE:MMM) stock price continues to drop after trading above $200 per share for much of the Summer. The stock price is now sub-$180 per share. Simultaneously the dividend yield has gone up to over 3.3%. This is a solid yield for this Dividend King and doubles that of the average dividend yield for the S&P 500. In addition, 3M has improved capital allocation, and dividend safety has improved. The main culprit driving down stock price is a revival of thousands of lawsuits regarding 3M’s surgical warming suit. Next, inflation is leading to higher input and labor costs. The company is also faced with a decline in automobile production due to a semiconductor chip shortage. The automobile market is a major one for 3M. Regardless, 3M has faced challenges before. The valuation has come down, though. Although not yet a deal, it is time to take a nibble and buy more 3M. I view the stock as a long-term buy.

Overview of 3M – Time to Take a Nibble

3M traces its history to 1902. The company has grown into one of the largest industrial conglomerates in the U.S. Today, 3M operates in four business segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. The company is known for its Consumer products, but it is also a major supplier to other manufacturers. Major brands include Post-it, Scotch, Scotch-Brite, ACE, Command, Filtrete, Nexcare, and Futuro. By sales in 2020, the largest segment is Safety & Industrial followed by Transportation & Electronics, Health Care, and the smallest segment is Consumer. Total sales were $32,184 million in 2020 and $34,734 million in the LTM.

3M’s Risks

A discussion of 3M’s risks is necessary due to the number of lawsuits. The main risk that is adversely affecting the stock price is that nearly 6,000 lawsuits for a 3M Bair HuggerTM surgical warming suit were reinstated by the 8th U.S. Court of Appeals…

Please read the complete article at my profile on Seeking Alpha for 3M – Time to Take a Nibble.

Disclosure: Long MMM


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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.

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