3M CO (MMM) Stock Fundamental Analysis
NYSE:MMM - New York Stock Exchange, Inc. - US88579Y1010 - Common Stock - Currency: USD
Overall MMM gets a fundamental rating of 5 out of 10. We evaluated MMM against 6 industry peers in the Industrial Conglomerates industry. While MMM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MMM has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
MMM had positive earnings in the past year.
MMM had a positive operating cash flow in the past year.
MMM had positive earnings in 4 of the past 5 years.
MMM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.92%, MMM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
MMM has a Return On Equity of 97.69%. This is amongst the best in the industry. MMM outperforms 100.00% of its industry peers.
MMM has a better Return On Invested Capital (13.70%) than 100.00% of its industry peers.
MMM had an Average Return On Invested Capital over the past 3 years of 11.12%. This is above the industry average of 8.04%.
The last Return On Invested Capital (13.70%) for MMM is above the 3 year average (11.12%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.92% | ||
| ROE | 97.69% | ||
| ROIC | 13.7% |
ROA(3y)3.02%
ROA(5y)6.63%
ROE(3y)0.78%
ROE(5y)16.81%
ROIC(3y)11.12%
ROIC(5y)12.9%
1.3 Margins
Looking at the Profit Margin, with a value of 17.79%, MMM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of MMM has grown nicely.
With an excellent Operating Margin value of 20.46%, MMM belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Operating Margin of MMM has remained more or less at the same level.
MMM has a Gross Margin of 41.21%. 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 Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.46% | ||
| PM (TTM) | 17.79% | ||
| GM | 41.21% |
OM growth 3Y-1.29%
OM growth 5Y0.76%
PM growth 3Y0.46%
PM growth 5Y3.85%
GM growth 3Y-4.12%
GM growth 5Y-2.49%
2. Health
2.1 Basic Checks
MMM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
MMM has less shares outstanding than it did 1 year ago.
MMM has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MMM has a worse debt to assets ratio.
2.2 Solvency
MMM has an Altman-Z score of 3.93. This indicates that MMM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.93, MMM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
A Debt/Equity ratio of 2.76 is on the high side and indicates that MMM has dependencies on debt financing.
MMM's Debt to Equity ratio of 2.76 is fine compared to the rest of the industry. MMM outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.76 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.93 |
ROIC/WACC1.68
WACC8.17%
2.3 Liquidity
MMM has a Current Ratio of 1.66. This is a normal value and indicates that MMM is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of MMM (1.66) is better than 83.33% of its industry peers.
A Quick Ratio of 1.25 indicates that MMM should not have too much problems paying its short term obligations.
MMM has a Quick ratio of 1.25. This is amongst the best in the industry. MMM outperforms 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
MMM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -22.67%.
Measured over the past years, MMM shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.72% on average per year.
MMM shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -20.06%.
The Revenue has been decreasing by -5.22% on average over the past years.
EPS 1Y (TTM)-22.67%
EPS 3Y-7.61%
EPS 5Y-2.72%
EPS Q2Q%-21.34%
Revenue 1Y (TTM)-20.06%
Revenue growth 3Y-11.42%
Revenue growth 5Y-5.22%
Sales Q2Q%-25.15%
3.2 Future
MMM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.41% yearly.
MMM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.21% yearly.
EPS Next Y-3.18%
EPS Next 2Y2.52%
EPS Next 3Y4.97%
EPS Next 5Y5.41%
Revenue Next Year1.33%
Revenue Next 2Y2.11%
Revenue Next 3Y2.45%
Revenue Next 5Y4.21%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.64, MMM is valued on the expensive side.
Based on the Price/Earnings ratio, MMM is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.60. MMM is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 18.38, the valuation of MMM can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MMM indicates a rather cheap valuation: MMM is cheaper than 83.33% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.43. MMM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.64 | ||
| Fwd PE | 18.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MMM is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.22 |
4.3 Compensation for Growth
MMM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.52%
EPS Next 3Y4.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.96%, MMM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.39, MMM pays a bit more dividend than its industry peers.
MMM's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
5.2 History
The dividend of MMM decreases each year by -8.81%.
MMM has been paying a dividend for at least 10 years, so it has 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)-8.81%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
MMM pays out 35.38% of its income as dividend. This is a sustainable payout ratio.
DP35.38%
EPS Next 2Y2.52%
EPS Next 3Y4.97%
154.15
+0.01 (+0.01%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners69.27%
Inst Owner Change5.55%
Ins Owners0.04%
Ins Owner Change4.99%
Market Cap82.96B
Analysts75.65
Price Target152.56 (-1.03%)
Short Float %1.83%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
Yearly Dividend3.63
Dividend Growth(5Y)-8.81%
DP35.38%
Div Incr Years33
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.75%
Min EPS beat(2)0.09%
Max EPS beat(2)5.42%
EPS beat(4)4
Avg EPS beat(4)5.49%
Min EPS beat(4)0.09%
Max EPS beat(4)13.52%
EPS beat(8)8
Avg EPS beat(8)9.58%
EPS beat(12)11
Avg EPS beat(12)8.28%
EPS beat(16)15
Avg EPS beat(16)9.32%
Revenue beat(2)0
Avg Revenue beat(2)-0.56%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)-0.51%
Revenue beat(4)1
Avg Revenue beat(4)-0.13%
Min Revenue beat(4)-0.8%
Max Revenue beat(4)1.4%
Revenue beat(8)3
Avg Revenue beat(8)-0.16%
Revenue beat(12)5
Avg Revenue beat(12)0.25%
Revenue beat(16)7
Avg Revenue beat(16)0.49%
PT rev (1m)-4.05%
PT rev (3m)-2.27%
EPS NQ rev (1m)-1.69%
EPS NQ rev (3m)-4.28%
EPS NY rev (1m)-1.35%
EPS NY rev (3m)-2.04%
Revenue NQ rev (1m)0.46%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.47%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.64 | ||
| Fwd PE | 18.38 | ||
| P/S | 3.38 | ||
| P/FCF | N/A | ||
| P/OCF | 85.26 | ||
| P/B | 18.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.22 |
EPS(TTM)7.47
EY4.85%
EPS(NY)8.39
Fwd EY5.44%
FCF(TTM)-0.13
FCFYN/A
OCF(TTM)1.81
OCFY1.17%
SpS45.55
BVpS8.29
TBVpS-5.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.92% | ||
| ROE | 97.69% | ||
| ROCE | 16.45% | ||
| ROIC | 13.7% | ||
| ROICexc | 17.8% | ||
| ROICexgc | 26.19% | ||
| OM | 20.46% | ||
| PM (TTM) | 17.79% | ||
| GM | 41.21% | ||
| FCFM | N/A |
ROA(3y)3.02%
ROA(5y)6.63%
ROE(3y)0.78%
ROE(5y)16.81%
ROIC(3y)11.12%
ROIC(5y)12.9%
ROICexc(3y)13.89%
ROICexc(5y)15.46%
ROICexgc(3y)26.14%
ROICexgc(5y)32.17%
ROCE(3y)13.54%
ROCE(5y)15.6%
ROICexcg growth 3Y-10.19%
ROICexcg growth 5Y-4.14%
ROICexc growth 3Y2.14%
ROICexc growth 5Y4.95%
OM growth 3Y-1.29%
OM growth 5Y0.76%
PM growth 3Y0.46%
PM growth 5Y3.85%
GM growth 3Y-4.12%
GM growth 5Y-2.49%
F-Score7
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.76 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.97 | ||
| Cap/Depr | 85.2% | ||
| Cap/Sales | 4.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 15.6% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z | 3.93 |
F-Score7
WACC8.17%
ROIC/WACC1.68
Cap/Depr(3y)87.82%
Cap/Depr(5y)85.14%
Cap/Sales(3y)5.49%
Cap/Sales(5y)5.14%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-22.67%
EPS 3Y-7.61%
EPS 5Y-2.72%
EPS Q2Q%-21.34%
EPS Next Y-3.18%
EPS Next 2Y2.52%
EPS Next 3Y4.97%
EPS Next 5Y5.41%
Revenue 1Y (TTM)-20.06%
Revenue growth 3Y-11.42%
Revenue growth 5Y-5.22%
Sales Q2Q%-25.15%
Revenue Next Year1.33%
Revenue Next 2Y2.11%
Revenue Next 3Y2.45%
Revenue Next 5Y4.21%
EBIT growth 1Y-12.49%
EBIT growth 3Y-12.56%
EBIT growth 5Y-4.5%
EBIT Next Year34.75%
EBIT Next 3Y15.33%
EBIT Next 5Y7.34%
FCF growth 1Y-101.7%
FCF growth 3Y-52.23%
FCF growth 5Y-34.69%
OCF growth 1Y-83.38%
OCF growth 3Y-37.51%
OCF growth 5Y-23.78%