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S&P 500   4,179.83
DOW   32,908.27
QQQ   347.99
Stock market today: Asian shares mostly rise after House approves debt ceiling deal
“Amazon Loophole” could hand you $28,544 in “royalty” payouts (Ad)
Alibaba Unveils Its Spin-Off Plans
The Most Upgraded Stocks From The Q1 Earnings Season
Instantly Find Hidden Trade Opportunities (Ad)
Oman launches $5B investment fund as part of efforts to diversify oil-dependant economy
Can the Dow's 2023 Runaway Winners Keep Running?
Instantly Find Hidden Trade Opportunities (Ad)
KLA Shares Soars As Chip Equipment Makers Surge 21% In May
Can These Two Crypto Stocks Stage a Comeback?
S&P 500   4,179.83
DOW   32,908.27
QQQ   347.99
Stock market today: Asian shares mostly rise after House approves debt ceiling deal
“Amazon Loophole” could hand you $28,544 in “royalty” payouts (Ad)
Alibaba Unveils Its Spin-Off Plans
The Most Upgraded Stocks From The Q1 Earnings Season
Instantly Find Hidden Trade Opportunities (Ad)
Oman launches $5B investment fund as part of efforts to diversify oil-dependant economy
Can the Dow's 2023 Runaway Winners Keep Running?
Instantly Find Hidden Trade Opportunities (Ad)
KLA Shares Soars As Chip Equipment Makers Surge 21% In May
Can These Two Crypto Stocks Stage a Comeback?
S&P 500   4,179.83
DOW   32,908.27
QQQ   347.99
Stock market today: Asian shares mostly rise after House approves debt ceiling deal
“Amazon Loophole” could hand you $28,544 in “royalty” payouts (Ad)
Alibaba Unveils Its Spin-Off Plans
The Most Upgraded Stocks From The Q1 Earnings Season
Instantly Find Hidden Trade Opportunities (Ad)
Oman launches $5B investment fund as part of efforts to diversify oil-dependant economy
Can the Dow's 2023 Runaway Winners Keep Running?
Instantly Find Hidden Trade Opportunities (Ad)
KLA Shares Soars As Chip Equipment Makers Surge 21% In May
Can These Two Crypto Stocks Stage a Comeback?

3M Stock is Worth a Look Because of the Company it Keeps

3M Stock is Worth a Look Because of the Company it Keeps

3M is a value stock that is aligned with many of the market’s most disruptive sectors 

3M (NYSE: MMM) delivered a double beat when it reported earnings on April 26. That wasn’t enough to satisfy investors who were in a selling mood. However, the stock is starting to rally. And MMM stock is beginning to look like a reasonable investment for investors who are looking for quality stocks to buy on the dip. 

A quick look at the company’s earnings show a nice trend. The company’s revenue and earnings in the first quarter beat analysts’ expectations. However, both numbers were lower from the same quarter in the prior year. But a better comparison may be to go back to the first quarter of the company’s 2019 fiscal year. And in that regard, the company’s numbers were higher on both accounts. 

I’m aware that statistics can say whatever you want so let me add some context to my opinion. The first quarter of 2021 was the beginning of the economic recovery. So it stands to reason that a company like 3M would see an influx of demand. What’s more interesting to me is to look at the company’s year-over-year earnings and revenue for the last three years. 

Year 

Earnings per share (EPS) 

Revenue 

2021 

$10.12 

$35.3 billion 


2020 

$8.75 

$32.19 billion 

2019 

$8.96 

$32.40 billion 

 So Why is MMM Stock Falling? 

In two words: supply chain. Like virtually every company, 3M is being affected by supply chain constraints and will likely continue to be for the foreseeable future. And chief executive officer (CEO) Mike Roman says that the company’s supply chain issues are likely to have an adverse impact on the company’s earnings for the remainder of the year. Not surprisingly, analyst sentiment has turned bearish in the days following the earnings report. However, the company's first quarter numbers suggest that the company has been reasonably successful at passing along cost increases to its customers.

Aiding the Disruptors 

By now investors have heard a lot about disruptive technology. But when consumers hear that term, they may think of devices like the smartphone that you may be reading this article on. And that’s a great example. However, in 2022 many of the companies that are disrupting the industry are in areas such as healthcare, artificial intelligence, and automation.  

3M does business in each of these sectors and more. And that’s what I meant in my headline when I say that MMM stock looks bullish because of the company it keeps. As these companies expand their business, they’ll be looking at products from suppliers like 3M to keep their supply chains moving. That’s a bullish trend for 2022.  

What to Do with 3M Stock? 

If you need a reason to buy MMM stock right now, all you need to look at is the dividend. 3M is a dividend king having increased its dividend in each of the last 65 years. But the company also has a dividend yield that currently is over 4%. And when you consider that earnings are growing and are forecast to grow in each of the next five years, the dividend looks very sustainable. 

I also consider the company’s price-to-earnings (P/E) ratio which is 15.44 as of this writing. It looks high compared to the sector average. However, compared to the company’s historical average it’s beginning to look attractive.  

In the short term, that may mean that MMM stock may continue to be volatile as investors attempt to confirm that the stock has found a bottom. But with the stock trading at the lower end of its 52-week range and below its pre-pandemic level opportunistic investors should look for an opportunity to add shares.  

Should you invest $1,000 in 3M right now?

Before you consider 3M, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and 3M wasn't on the list.

While 3M currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
3M (MMM)
2.9064 of 5 stars
$93.31-2.9%6.43%9.67Hold$122.69
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Chris Markoch

About Chris Markoch

Contributing Author: Retirement, Individual Investing

Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.

Contact Chris Markoch via email at CTMarkoch@msn.com.

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