Monday, July 2, 2012


3M Co Stock Buy Recommendation Reiterated (MMM)




NEW YORK (TheStreet) -- 3M (NYSE:MMM) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
  • MMM's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Industrial Conglomerates industry and the overall market, 3M CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for 3M CO is rather high; currently it is at 52.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.00% is above that of the industry average.
  • Net operating cash flow has increased to $828.00 million or 12.96% when compared to the same quarter last year. In addition, 3M CO has also modestly surpassed the industry average cash flow growth rate of 10.86%.
  • 3M Inkjet Transparency Film
3M Company operates as a diversified technology company worldwide. The company has a P/E ratio of 14.4, equal to the average conglomerates industry P/E ratioand below the S&P 500 P/E ratio of 17.7. 3M has a market cap of $60.48 billion and is part of the conglomeratessector and conglomerates industry. Shares are up 6.6% year to date as of the close of trading on Thursday.
You can view the full 3M Ratings Report or get investment ideas from our investment research center. 
By TheStreet Wire07/02/12 - 08:10 AM EDT--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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