Stock Analysis: 3M

In the last weeks the stock market decided to go down a bit, and especially one stock got really hammered in terms of the stock price. It is one of the best dividend paying companies in the world and currently has a stock price which seems to be very cheap. I am talking about 3M, so let’s have a look at it if it is worth an investment.

Overview

3M Company (MMM) is a diversified technology company. The company operates in six business segments: Industrial and Transportation, Health Care, Consumer and Office,Safety, Security and Protection Services, Display and Graphics, and Electro and Communications. 3M was founded in 1929, and is based in St. Paul, MN. In February 2014, 3M acquired Treo Solutions, a healthcare data intelligence and analytics company. 3M is largely affected by prices for raw materials and purchased components, as well as improving operational efficiency and productivity. 3M is a dividend aristocrat and has been consecutively increasing its dividend annually since 1959. 3M pays its dividend quarterly.

Dividend Data

MMM has increased their dividendssince 60 years. This is quite an impressive streak of dividend increases which makes the stock one of the best dividend paying companies. The latest increase was 6%, which is still a good growth rate given the long period of dividend increases.

Dividend: Currently the company pays a yearly dividend of 5.76 USD, which equals a yield of 3.41%. The latest dividend increase was at 6.0%, which is slightly below my goal of having a yearly increase of 7.5%.

Payout Ratio: The current payout ratio is at 56.1%, which is on a very good level given the latest increase and the long history of dividend increases.

Stock Price

The share price of MMM is down by almost 11.45% on year to date basis. This fact makes stock look quite cheap at the moment with a price of 169.09 USD.

Valuation

Price/Earning: The current P/E ratio is currently at 17.95, the 5 year average is at 23.27. So based on the P/E ratio the stocks looks really cheap at the moment.

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Disclaimer: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in ...

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Adam Reynolds 1 month ago Member's comment

$MMM is a great choice.