MMM : NYSE : Industrial Goods
$176.23 up 0.86 | 0.49%
Today's Range: 176.09 - 177.15
Avg. Daily Volume: 1,667,000
09/30/16 - 4:03 PM ET

Financial Analysis


3M CO's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. 3M CO has weak liquidity. Currently, the Quick Ratio is 0.90 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 9.15% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)7662.07686.0
EBITDA ($mil)2232.02184.0
EBIT ($mil)1866.01840.0
Net Income ($mil)1291.01300.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1865.03485.0
Total Assets ($mil)33235.031388.0
Total Debt ($mil)11749.08517.0
Equity ($mil)11894.013093.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin55.1954.28
EBITDA Margin29.1328.41
Operating Margin24.3523.94
Sales Turnover0.910.99
Return on Assets14.7415.86
Return on Equity41.1938.04
Debt Q2 FY16 Q2 FY15
Current Ratio1.582.64
Debt/Capital0.50.39
Interest Expense38.035.0
Interest Coverage49.1152.57


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)604.4624.75
Div / share1.111.03
EPS2.082.02
Book value / share19.6820.96
Institutional Own % n/a n/a
Avg Daily Volume1734350.01904993.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 31.81 for the Industrial Conglomerates industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 9.14 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 4.60. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MMM 22.94 Peers 31.81   MMM 16.54 Peers 34.84

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

MMM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MMM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MMM 20.44 Peers 20.21   MMM 2.76 Peers 0.96

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

MMM is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MMM trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MMM 9.14 Peers 4.60   MMM 2.34 Peers 257.29

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MMM is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MMM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MMM 3.61 Peers 2.55   MMM -3.34 Peers 4.06

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MMM is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MMM significantly trails its peers on the basis of sales growth

 

 

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