MMM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 7 industry peers in the Industrial Conglomerates industry. MMM has an excellent profitability rating, but there are some minor concerns on its financial health. MMM is valued correctly, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year MMM was profitable.
In the past year MMM had a positive cash flow from operations.
Of the past 5 years MMM 4 years were profitable.
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 8.61%, MMM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
MMM's Return On Equity of 68.46% is amongst the best of the industry. MMM outperforms 100.00% of its industry peers.
MMM has a better Return On Invested Capital (13.64%) than 100.00% of its industry peers.
MMM had an Average Return On Invested Capital over the past 3 years of 12.18%. This is above the industry average of 7.65%.
The last Return On Invested Capital (13.64%) for MMM is above the 3 year average (12.18%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	8.61%
ROE	68.46%
ROIC	13.64%

ROA(3y)1.75%

ROA(5y)6.05%

ROE(3y)10.52%

ROE(5y)22.03%

ROIC(3y)12.18%

ROIC(5y)11.3%

1.3 Margins

MMM has a better Profit Margin (13.03%) than 85.71% of its industry peers.
In the last couple of years the Profit Margin of MMM has declined.
MMM has a better Operating Margin (19.29%) than 85.71% of its industry peers.
MMM's Operating Margin has declined in the last couple of years.
MMM's Gross Margin of 39.91% is amongst the best of the industry. MMM outperforms 100.00% of its industry peers.
MMM's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	19.29%
PM (TTM)	13.03%
GM	39.92%

OM growth 3Y36.93%

OM growth 5Y-2.37%

PM growth 3Y-16.13%

PM growth 5Y-5.11%

GM growth 3Y0.43%

GM growth 5Y-3.86%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MMM is creating some value.
The number of shares outstanding for MMM has been reduced compared to 1 year ago.
MMM has less shares outstanding than it did 5 years ago.
MMM has a worse debt/assets ratio than last year.

2.2 Solvency

The Debt to FCF ratio of MMM is 9.33, which is on the high side as it means it would take MMM, 9.33 years of fcf income to pay off all of its debts.
MMM has a Debt to FCF ratio of 9.33. This is amongst the best in the industry. MMM outperforms 85.71% of its industry peers.
MMM has a Debt/Equity ratio of 2.30. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.30, MMM is in line with its industry, outperforming 57.14% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	2.3
Debt/FCF	9.33
Altman-Z	N/A

ROIC/WACC1.7

WACC8.02%

2.3 Liquidity

MMM has a Current Ratio of 1.71. This is a normal value and indicates that MMM is financially healthy and should not expect problems in meeting its short term obligations.
MMM has a Current ratio of 1.71. This is amongst the best in the industry. MMM outperforms 85.71% of its industry peers.
A Quick Ratio of 1.33 indicates that MMM should not have too much problems paying its short term obligations.
MMM has a Quick ratio of 1.33. This is in the better half of the industry: MMM outperforms 71.43% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.71
Quick Ratio	1.33

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 1.00% over the past year.
Measured over the past years, MMM shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.63% on average per year.
The Revenue has been growing slightly by 1.52% in the past year.
The Revenue has been decreasing by -4.97% on average over the past years.

EPS 1Y (TTM)1%

EPS 3Y-7.24%

EPS 5Y-1.63%

EPS Q2Q%8.93%

Revenue 1Y (TTM)1.52%

Revenue growth 3Y-1.57%

Revenue growth 5Y-4.97%

Sales Q2Q%3.7%

3.2 Future

Based on estimates for the next years, MMM will show a small growth in Earnings Per Share. The EPS will grow by 5.78% on average per year.
The Revenue is expected to grow by 3.91% on average over the next years.

EPS Next Y7.89%

EPS Next 2Y8.05%

EPS Next 3Y7.7%

EPS Next 5Y5.78%

Revenue Next Year2.99%

Revenue Next 2Y3%

Revenue Next 3Y3.57%

Revenue Next 5Y3.91%

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 19.93 indicates a rather expensive valuation of MMM.
MMM's Price/Earnings ratio is rather cheap when compared to the industry. MMM is cheaper than 100.00% of the companies in the same industry.
MMM is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.47, which indicates a rather expensive current valuation of MMM.
Based on the Price/Forward Earnings ratio, MMM is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, MMM is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	19.93
Fwd PE	18.47

4.2 Price Multiples

71.43% of the companies in the same industry are more expensive than MMM, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	63.21
EV/EBITDA	N/A

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MMM may justify a higher PE ratio.

PEG (NY)2.53

PEG (5Y)N/A

EPS Next 2Y8.05%

EPS Next 3Y7.7%

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5. Dividend

5.1 Amount

MMM has a Yearly Dividend Yield of 1.87%.
Compared to an average industry Dividend Yield of 4.52, MMM pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.82, MMM has a dividend comparable with the average S&P500 company.

		Industry Rank	Sector Rank
Dividend Yield	1.87%

5.2 History

The dividend of MMM decreases each year by -8.82%.
MMM has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)-8.82%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

DP0%

EPS Next 2Y8.05%

EPS Next 3Y7.7%

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3M CO / MMM FAQ

What is the ChartMill fundamental rating of 3M CO (MMM) stock?

ChartMill assigns a fundamental rating of 5 / 10 to MMM.

What is the valuation status of 3M CO (MMM) stock?

ChartMill assigns a valuation rating of 4 / 10 to 3M CO (MMM). This can be considered as Fairly Valued.

Can you provide the profitability details for 3M CO?

3M CO (MMM) has a profitability rating of 8 / 10.

What is the valuation of 3M CO based on its PE and PB ratios?

The Price/Earnings (PE) ratio for 3M CO (MMM) is 19.93 and the Price/Book (PB) ratio is 17.98.

What is the expected EPS growth for 3M CO (MMM) stock?

The Earnings per Share (EPS) of 3M CO (MMM) is expected to grow by 7.89% in the next year.