Best Dividend Stocks. Analyze the stocks with the best dividend, while also showing decent profitability and health.


3M CO

New York Stock Exchange, Inc. / Industrials / Industrial Conglomerates

Fundamental Rating

5

Taking everything into account, MMM scores 5 out of 10 in our fundamental rating. MMM was compared to 10 industry peers in the Industrial Conglomerates industry. MMM has only an average score on both its financial health and profitability. MMM has a bad growth rate and is valued cheaply. Finally MMM also has an excellent dividend rating. These ratings would make MMM suitable for value and dividend investing!



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1. Profitability

1.1 Basic Checks

In the past year MMM was profitable.
MMM had a positive operating cash flow in the past year.
MMM had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MMM had a positive operating cash flow.

1.2 Ratios

MMM's Return On Assets of -13.83% is on the low side compared to the rest of the industry. MMM is outperformed by 60.00% of its industry peers.
MMM's Return On Equity of -145.52% is on the low side compared to the rest of the industry. MMM is outperformed by 60.00% of its industry peers.
MMM has a Return On Invested Capital of 14.08%. This is amongst the best in the industry. MMM outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MMM is significantly above the industry average of 7.86%.
The 3 year average ROIC (14.01%) for MMM is below the current ROIC(14.08%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA -13.83%
ROE -145.52%
ROIC 14.08%
ROA(3y)3.73%
ROA(5y)6.56%
ROE(3y)-22.31%
ROE(5y)4.06%
ROIC(3y)14.01%
ROIC(5y)14.74%

1.3 Margins

MMM's Operating Margin of 17.66% is amongst the best of the industry. MMM outperforms 90.00% of its industry peers.
In the last couple of years the Operating Margin of MMM has declined.
MMM has a Gross Margin of 43.77%. This is amongst the best in the industry. MMM outperforms 100.00% of its industry peers.
In the last couple of years the Gross Margin of MMM has declined.
Industry RankSector Rank
OM 17.66%
PM (TTM) N/A
GM 43.77%
OM growth 3Y-6.55%
OM growth 5Y-3.16%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.43%
GM growth 5Y-2.3%

5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MMM is creating value.
MMM has more shares outstanding than it did 1 year ago.
MMM has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MMM has been reduced compared to a year ago.

2.2 Solvency

MMM has an Altman-Z score of 2.85. This is not the best score and indicates that MMM is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of MMM (2.85) is better than 90.00% of its industry peers.
MMM has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as MMM would need 3.17 years to pay back of all of its debts.
The Debt to FCF ratio of MMM (3.17) is better than 90.00% of its industry peers.
MMM has a Debt/Equity ratio of 3.10. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 3.10, MMM is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 3.1
Debt/FCF 3.17
Altman-Z 2.85
ROIC/WACC1.86
WACC7.57%

2.3 Liquidity

A Current Ratio of 1.07 indicates that MMM should not have too much problems paying its short term obligations.
MMM has a Current ratio of 1.07. This is comparable to the rest of the industry: MMM outperforms 60.00% of its industry peers.
A Quick Ratio of 0.76 indicates that MMM may have some problems paying its short term obligations.
MMM's Quick ratio of 0.76 is in line compared to the rest of the industry. MMM outperforms 50.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.07
Quick Ratio 0.76

3

3. Growth

3.1 Past

The earnings per share for MMM have decreased by -8.51% in the last year.
The Earnings Per Share has been decreasing by -1.53% on average over the past years.
MMM shows a decrease in Revenue. In the last year, the revenue decreased by -4.52%.
The Revenue has been decreasing by -0.05% on average over the past years.
EPS 1Y (TTM)-8.51%
EPS 3Y1.83%
EPS 5Y-1.53%
EPS growth Q2Q6.14%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y0.51%
Revenue growth 5Y-0.05%
Revenue growth Q2Q-0.82%

3.2 Future

Based on estimates for the next years, MMM will show a small growth in Earnings Per Share. The EPS will grow by 6.16% on average per year.
Based on estimates for the next years, MMM will show a small growth in Revenue. The Revenue will grow by 5.44% on average per year.
EPS Next Y4.59%
EPS Next 2Y5.6%
EPS Next 3Y5.86%
EPS Next 5Y6.16%
Revenue Next Year1.48%
Revenue Next 2Y2.39%
Revenue Next 3Y2.86%
Revenue Next 5Y5.44%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

MMM is valuated reasonably with a Price/Earnings ratio of 11.48.
MMM's Price/Earnings ratio is a bit cheaper when compared to the industry. MMM is cheaper than 70.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. MMM is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 10.98 indicates a reasonable valuation of MMM.
100.00% of the companies in the same industry are more expensive than MMM, based on the Price/Forward Earnings ratio.
MMM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.79.
Industry RankSector Rank
PE 11.48
Fwd PE 10.98

4.2 Price Multiples

MMM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MMM is cheaper than 70.00% of the companies in the same industry.
90.00% of the companies in the same industry are more expensive than MMM, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 11.57
EV/EBITDA 8.61

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MMM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of MMM may justify a higher PE ratio.
PEG (NY)2.5
PEG (5Y)N/A
EPS Next 2Y5.6%
EPS Next 3Y5.86%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.60%, MMM is a good candidate for dividend investing.
MMM's Dividend Yield is rather good when compared to the industry average which is at 6.61. MMM pays more dividend than 90.00% of the companies in the same industry.
MMM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 5.6%

5.2 History

The dividend of MMM has a limited annual growth rate of 1.98%.
MMM has been paying a dividend for at least 10 years, so it has a reliable track record.
MMM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.98%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

The earnings of MMM are negative and hence is the payout ratio. MMM will probably not be able to sustain this dividend level.
MMM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-47.33%
EPS Next 2Y5.6%
EPS Next 3Y5.86%