This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3M: Terrific Company, Good Stock

NEW YORK ( F.A.S.T. Graphs) -- In my most recent article, I detailed how Johnson & Johnson (JNJ - Get Report) was a "great company," but perhaps only a reasonable investment at that time. It's always important to underscore the difference between a great company and a great stock. With today's commentary, I'd like to follow a similar ideology.

Jim Cramer recently called 3M (MMM - Get Report) terrific, without going into many details, on his fast-paced "Mad Money" show on CNBC. As you could glean from the headine, I definitely believe that 3M is a terrific company, so I would like to take a closer look at the stock.

Let's work through this framework by utilizing the Fundamentals Analyzer Software Tool of F.A.S.T. Graphs (TM).

3M is a science-based company with brands such as: Post-It, Scotch, Command, Ace, Nexcare and Filtrete. In turn, they have products that represent more than 90 different market segments, ranging in everything from medical devices, bandages and veterinary products, to filters, aerospace maintenance and fire protection. Perhaps more commonly, you know the company by its office supplies.

If we look at the Earnings and Price Correlated graph below, we can instantly see that 3M has been quite successful in offering its everyday solutions. 3M has grown operating earnings (orange line) by about 8.8% a year for the last decade and a half; moving from $2.13 a share in 1999 to today's expected EPS amount of $6.70. In addition, you can see the dividend (pink line) has been growing steadily while the overall payout ratio has actually been decreasing. Aside from a few earnings hiccups during the last two recessions, 3M has been a model of consistency.

In turn, it should be expected that the operating metrics of the company allowed for this solid earnings growth. And this is precisely what we see. For instance, gross profit margin and net profit margin have remained remarkably consistent over the last 15 years.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JNJ $101.03 -0.10%
MMM $159.78 -0.77%
AAPL $131.47 -0.44%
FB $80.42 -0.16%
GOOG $537.37 -0.45%

Markets

DOW 18,074.57 -88.42 -0.49%
S&P 500 2,117.84 -5.64 -0.27%
NASDAQ 5,090.5250 -16.0680 -0.31%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs