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 an average financial health and profitability rating. MMM has a valuation in line with the averages, but it does not seem to be growing. MMM also has an excellent dividend rating. This makes MMM very considerable for dividend investing!



6

1. Profitability

1.1 Basic Checks

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

1.2 Ratios

With a Return On Assets value of -13.83%, MMM is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
MMM has a worse Return On Equity (-145.52%) than 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.
The Average Return On Invested Capital over the past 3 years for MMM is significantly above the industry average of 7.86%.
The last Return On Invested Capital (14.08%) for MMM is above the 3 year average (14.01%), which is a sign of increasing profitability.
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 has a better Operating Margin (17.66%) than 90.00% of its industry peers.
In the last couple of years the Operating Margin of MMM has declined.
The Gross Margin of MMM (43.77%) is better than 100.00% of its industry peers.
MMM's Gross Margin has declined in the last couple of years.
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%

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5

2. Health

2.1 Basic Checks

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

2.2 Solvency

An Altman-Z score of 2.75 indicates that MMM is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.75, MMM belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 3.17, MMM belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
MMM has a Debt/Equity ratio of 3.10. This is a high value indicating a heavy dependency on external financing.
MMM's Debt to Equity ratio of 3.10 is on the low side compared to the rest of the industry. MMM is outperformed by 60.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 3.1
Debt/FCF 3.17
Altman-Z 2.75
ROIC/WACC1.83
WACC7.71%

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 (1.07) which is comparable to the rest of the industry.
MMM has a Quick Ratio of 1.07. This is a bad value and indicates that MMM is not financially healthy enough and could expect problems in meeting 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

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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%.
MMM shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.05% yearly.
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.
MMM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.44% yearly.
EPS Next Y-16.2%
EPS Next 2Y-9.1%
EPS Next 3Y-4.67%
EPS Next 5Y6.16%
Revenue Next Year-18.65%
Revenue Next 2Y-11.92%
Revenue Next 3Y-7.08%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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6

4. Valuation

4.1 Price/Earnings Ratio

MMM is valuated reasonably with a Price/Earnings ratio of 9.90.
Based on the Price/Earnings ratio, MMM is valued a bit cheaper than 70.00% of the companies in the same industry.
MMM is valuated cheaply when we compare the Price/Earnings ratio to 24.80, which is the current average of the S&P500 Index.
MMM is valuated reasonably with a Price/Forward Earnings ratio of 11.81.
Based on the Price/Forward Earnings ratio, MMM is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
MMM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.27.
Industry RankSector Rank
PE 9.9
Fwd PE 11.81

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, MMM is valued a bit cheaper than 70.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MMM is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 9.99
EV/EBITDA 7.58

4.3 Compensation for Growth

The decent profitability rating of MMM may justify a higher PE ratio.
MMM's earnings are expected to decrease with -4.67% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.1%
EPS Next 3Y-4.67%

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8

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 6.48%, MMM is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.76, MMM pays a better dividend. On top of this MMM pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, MMM pays a better dividend.
Industry RankSector Rank
Dividend Yield 6.48%

5.2 History

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

5.3 Sustainability

MMM has negative earnings and hence a negative payout ratio. The dividend may be in danger.
MMM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-47.33%
EPS Next 2Y-9.1%
EPS Next 3Y-4.67%

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