3M Co (MMM, Financial), a renowned multinational conglomerate, has experienced a notable uptick in its stock performance over the past three months. With a current market capitalization of $52.84 billion, the company's stock price stands at $95.49, reflecting a 16.65% increase since the previous quarter. Despite a slight dip of 0.50% over the past week, the overall trend has been positive. The GF Value of $97.9 suggests that 3M's stock is Fairly Valued, a shift from its previous status of Modestly Undervalued when the GF Value was at $139.54. This change indicates a market correction aligning the stock price closer to its intrinsic value.
Introduction to 3M Co
3M Co, operating in the conglomerates industry, has a storied history dating back to 1902. Known for its robust research and development capabilities, 3M leverages its scientific and technological expertise across a diverse range of product categories. The company is structured into three main business segments: safety and industrial, transportation and electronics, and consumer. With a significant portion of its revenue—nearly 50%—originating from international markets, 3M's global presence is a testament to its expansive reach and the universal appeal of its products. The safety and industrial segment, in particular, contributes a substantial share of net sales, underscoring the company's impact on various consumers and end markets.
Assessing 3M's Profitability
3M's Profitability Rank stands at a strong 7/10, indicating robust profitability in comparison to its industry peers. The company's Operating Margin of -27.65% is better than 7.28% of 508 companies within the industry. Furthermore, 3M's ROE (Return on Equity) of -73.95% outperforms 1.94% of 516 companies, while its ROA (Return on Assets) of -14.43% surpasses 7.01% of 528 companies. The company's ROIC (Return on Invested Capital) of -15.89% is also better than 4.56% of 526 companies. Over the past decade, 3M has maintained profitability for 9 years, ranking higher than 68.16% of 512 companies in the industry. These figures reflect 3M's ability to generate profits and manage its resources effectively relative to its competitors.
Growth Prospects of 3M
The Growth Rank for 3M is currently at 2/10, suggesting that the company's growth prospects may be limited. Despite this, 3M's 3-Year Revenue Growth Rate per Share of 2.20% is higher than 36.1% of 482 companies in its industry. The same rate over a 5-year period also stands at 2.20%, surpassing 45.82% of 467 companies. However, the company's Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at -7.40%, which, while not impressive, is still better than 0% of 49 companies. The 3-Year EPS without NRI (Net of Recurring Income) Growth Rate of -0.20% outperforms 29.37% of 378 companies, and the 5-Year EPS without NRI Growth Rate of 0.40% is better than 27.06% of 255 companies. The EPS Growth Rate (Future 3Y To 5Y Est) is estimated at -5.00%, which exceeds the performance of 3.85% of 26 companies. These metrics indicate that while 3M's growth is not leading the industry, it still holds a competitive position.
Notable Shareholders in 3M
Among the notable shareholders of 3M, Steven Cohen (Trades, Portfolio) leads with 1,378,840 shares, representing a 0.25% share percentage. Following him is Jim Simons (Trades, Portfolio), holding 800,800 shares, which accounts for 0.14% of the company's shares. Jeremy Grantham (Trades, Portfolio) also has a significant stake, with 515,350 shares, making up 0.09% of the shares. These prominent investors' involvement in 3M highlights the company's appeal to savvy market participants.
Competitive Landscape
When compared to its competitors, 3M stands out with a significantly higher market capitalization. MDU Resources Group Inc (MDU, Financial) has a market cap of $5.09 billion, Valmont Industries Inc (VMI, Financial) is valued at $4.19 billion, and Griffon Corp (GFF, Financial) at $3.31 billion. This comparison underscores 3M's dominant market position within the conglomerates industry.
Conclusion
In summary, 3M Co's current valuation status reflects a stock that is Fairly Valued, with a recent performance that has seen a substantial increase over the past three months. The company's strong profitability metrics, as indicated by its Profitability Rank, and its competitive growth rates, despite a low Growth Rank, suggest a stable financial foundation. The presence of high-profile shareholders like Steven Cohen (Trades, Portfolio), Jim Simons (Trades, Portfolio), and Jeremy Grantham (Trades, Portfolio) further validates the company's market position. When juxtaposed with its competitors, 3M's superior market capitalization highlights its prominence in the industry. Investors may find 3M an interesting case of a well-established company navigating the challenges of growth while maintaining profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
