Shares of this conglomerate have declined to a very discounted value, but once the current volatility lessens, a case for a turnaround will be likely. The shares have a current dividend yield of 4.49%, paid quarterly.
3M Company (MMM)
From The Prudent Speculator
3M is a conglomerate that “applies science in collaborative ways to improve lives daily,” operating with four business segments: Safety and Industrial, Transportation and Electronics, Health Care and Consumer.
A litany of negative headlines related to PFAS (per-and polyfluoroalkyl substances) litigation, along with elusive revenue growth have put shares on a downward skid since peaking at $258 some 25 months ago. 2019 also preoccupied management with transitioning the company’s business model to a more decentralized form and reducing headcount across the firm.
We realize that there is plenty of uncertainty on the horizon; however, we think recent acquisitions of MModal and Acelity, paired with typical research and development spend averaging 6% of revenue will get the growth engine for the high-quality stock going again. We also like 3M’s robust free cash flow, dividend yield and discounted forward earnings multiple.
John Buckingham, The Prudent Speculator, www.theprudentspeculator.com, 877-817-4394, March 3, 2020
Nancy’s Note: Until we make progress in defeating the coronavirus, we expect continued volatility in the markets, and recommend remaining defensive. That doesn’t mean Sell; remember, you don’t have real losses until you sell your stocks. But it does mean being judicious when buying. For the near future, I’m going to include this message as an alert that, certainly, you may buy these recommendations, but for most of us, they will provide entries into a ‘watch’ list that can be acted upon as the volatility disperses. Thank you for your loyalty, and please don’t hesitate to reach out to me with your questions.