Hey investors, have a great Saturday.
We've been covering $MMM lately as the company has been facing lawsuits lately.
And so I'm wondering how you view this company and what your opinion of it is at the moment.
I personally find this company great and have bought its stock. I like its focus and overall it is a great dividend stock.
However, the lawsuits are not small and will probably cost $MMM a lot of money. But I think the company is trying and taking the necessary steps to continue to thrive.
So far so good for me, I'm holding
It's still a great dividend. I don't think these disputes will ever come to the catastrophic end that is expected.
I also think that no lawsuit will stop or threaten 3M.
I would say that this is a proven stable company with a clear business model and there is absolutely nothing to be afraid of... I just don't think it's the kind of "sexy" dynamic company I would invest in... it's a bit of a basket case :)
When I look at 3M, I see a long-term decline in gross margin (2013/47.83% and 2022/43.81%) and a flat EBITDA (2013/8bn and 2023/8.6bn).EPS increased by about 30% thanks to massive share buybacks in 2013-2018, when the stock was historically very expensive. At the moment they have high reserves (16% of net sobriety) the lowest interest coverage on debt since 2006 and, except for 2019, the highest FC/net debt ratio.
5y growth divi (3.36% CAGR) EPS growth expected 3-5y approx 2% so current FWD PE 2023 is 12.10 and 2024 is 11, PEG ratio 6.6.
Given the separation of the healthcare division, the two binding lawsuits there are pretty much unknown to me and if I wanted to have "certain" 6%pa, I would probably see more interesting opportunities in the market.
I've shared my opinion of 3M here a few times. But in short, I have it in my portfolio too, I like the business, the numbers are solid, it pays a dividend and is currently down just because of the litigation or the uncertainty surrounding it. There are then multiple scenarios to work with. Overall, I think it won't be that serious in the end, it will end up with some compensation and then hopefully we'll look higher.