3M Co. (MMM) shares are essentially flat year-to-date, but that doesn’t fully refelct the company’s strong performance.
Company Description
3M produces thousands of innovative products for dozens of diverse markets. The company’s core strength is applying its more than 40 distinct technology platforms, often in combination, to a wide array of customer needs.
With $23 billion in annual sales, 3M employs 75,000 people worldwide and has operations in more than 65 countries. 3M operates in six segments: Industrial and Transportation; Health Care; Safety, Security and Protection Services; Consumer and Office; Display and Graphics; and Electro and Communications.
Fourth-Quarter Results
3M had sales of $6.1 billion came, an increase of 10.9% from the fourth quarter of last year. The company earned $1.30 per share, up 34% from the year-ago quarter and 9 cents higher than the Zacks Consensus Estimate.
Management also boosted its 2010 earnings guidance from $4.85-$5.00 to $4.90-$5.10.
Growth and Income
3M has a current dividend yield of 2.6%.
The company paid a dividend of $52.5 cents per share for the first quarter. This is a 3% increase over its quarterly dividend in 2009. It also marks the 52nd consecutive year of dividend increases and its 374th consecutive quarterly dividend.
Additionally, analysts expect MMM to grow its earnings per share at 11.5% per year for the next five years.
Higher EPS Estimates
After the company’s 4Q earnings report, the Zacks Consensus Estimate for 2010 increased from $5.06 to $5.13, and the Zacks Consensus Estimate for 2011 went from $5.57 to $5.69.
We note that 3M has beaten the Zacks Consensus Estimate by an average of 40.7% in four of the last five quarters.
Industry Leader
3M has a return on equity of 27.8%, well above the industry average of 10.7%. The company’s net profit margin of 13.8% is more than double the industry average of 6.3%. 3M’s debt/equity ratio is just 0.4%, compared to the industry average of 29.2%.
