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.