3M CO (MMM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MMM - US88579Y1010 - Common Stock
160.42 USD
+0.9 (+0.56%)
We assign a fundamental rating of 5 out of 10 to MMM. MMM was compared to 7 industry peers in the Industrial Conglomerates industry. While MMM has a great profitability rating, there are some minor concerns on its financial health. MMM has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year MMM was profitable.
- MMM had a positive operating cash flow in the past year.
- Of the past 5 years MMM 4 years were profitable.
- In the past 5 years MMM always reported a positive cash flow from operatings.
1.2 Ratios
- MMM has a better Return On Assets (8.61%) than 100.00% of its industry peers.
- With an excellent Return On Equity value of 68.46%, MMM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 13.64%, MMM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- 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's Profit Margin of 13.03% is amongst the best of the industry. MMM outperforms 85.71% of its industry peers.
- MMM's Profit Margin has declined in the last couple of years.
- MMM has a better Operating Margin (19.29%) than 85.71% of its industry peers.
- In the last couple of years the Operating Margin of MMM has declined.
- 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%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MMM is still creating some value.
- MMM has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for MMM has been reduced compared to 5 years ago.
- Compared to 1 year ago, MMM has a worse debt to assets ratio.
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.
- A Debt/Equity ratio of 2.30 is on the high side and indicates that MMM has dependencies on debt financing.
- MMM has a Debt to Equity ratio of 2.30. This is comparable to the rest of the industry: MMM outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.3 | ||
| Debt/FCF | 9.33 | ||
| Altman-Z | N/A |
ROIC/WACC1.66
WACC8.24%
2.3 Liquidity
- A Current Ratio of 1.71 indicates that MMM should not have too much problems paying its short term obligations.
- The Current ratio of MMM (1.71) is better than 85.71% of its industry peers.
- MMM has a Quick Ratio of 1.33. This is a normal value and indicates that MMM is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.33, MMM is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.33 |
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.
- MMM shows a small growth in Revenue. In the last year, the Revenue has grown by 1.52%.
- 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
- The Earnings Per Share is expected to grow by 5.78% on average over the next years.
- MMM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.91% yearly.
EPS Next Y7.89%
EPS Next 2Y8.05%
EPS Next 3Y7.7%
EPS Next 5Y5.78%
Revenue Next Year3.49%
Revenue Next 2Y3.29%
Revenue Next 3Y3.04%
Revenue Next 5Y3.91%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 19.90 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.
- When comparing the Price/Earnings ratio of MMM to the average of the S&P500 Index (27.25), we can say MMM is valued slightly cheaper.
- MMM is valuated rather expensively with a Price/Forward Earnings ratio of 18.45.
- 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.
- When comparing the Price/Forward Earnings ratio of MMM to the average of the S&P500 Index (25.98), we can say MMM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.9 | ||
| Fwd PE | 18.45 |
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 | 63.13 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MMM does not grow enough to justify the current Price/Earnings ratio.
- MMM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.52
PEG (5Y)N/A
EPS Next 2Y8.05%
EPS Next 3Y7.7%
5. Dividend
5.1 Amount
- MMM has a Yearly Dividend Yield of 1.79%.
- Compared to an average industry Dividend Yield of 4.45, 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 | 1.79% |
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%
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 19.9 and the Price/Book (PB) ratio is 17.95.
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.