Shares of 3M (MMM) have seen an impressive 60% rise over the past 12 months. Some of these gains were the result of a spike in the sales of its N95 respirator masks. However, MMM does much more than make protective gear.

MMM has invested in innovation, creating a steady stream of new and useful product brands. In short, MMM is a well-diversified company with manufacturing operations throughout the world. Let’s take a look at whether now is the optimal time to buy MMM stock.

MMM Merits

MMM is priced a mere $4 away from its 52-week high of $192.09, yet its forward P/E ratio is still a reasonable 19.85. MMM also pays a dividend of 3.12%. MMM’s dividend has jumped at an annualized rate of 10% across the prior decade. This increase is significant as it represents three times the historical inflation rate. Though MMM sales plateaued in 2020 due to the coronavirus pandemic and its adjusted earnings declined slightly more than 1%, the challenges were expected considering the state of the economy.

As long as MMM can get past its pending material lawsuits, there is certainly ample runway for the stock to run higher. MMM executives believe the company will enjoy sales growth between 5-8% in 2021 along with earnings growth of 5-10%. If you still aren’t intrigued by MMM, consider that the company decreased its net debt that takes cash balances into account. However, this reduction wasn’t minor in the slightest. Instead, MMM’s net debt declined 23% in the prior year.

Though you might not be aware of it, there is a good chance you have MMM products in your home as well as your workplace. This industrial company makes a wide variety of sundries used in the home, the office, and other workplaces. MMM products range from sticky notes to tape, glue, wraps, sealants, belts, filters, and more.

MMM According to the Analysts

Analysts are slightly bullish on MMM, setting an average target price of $183.43. If MMM were to reach this level, it would have increased more than 3.5%. The high analyst price target for the stock is $200, while the low is $128. A total of 18 analysts have provided recommendations for the stock—twelve analysts rate MMM as a Hold. A total of three analysts consider MMM a Buy. One analyst considers the stock a Strong Buy, another considers it a Sell, and one more views the stock as a Strong Sell.

MMM POWR Ratings

MMM has an A grade in the Quality component of the POWR Ratings and Bs in the Momentum and Stability components. Click here to find out how MMM fares in the remainder of the POWR Ratings components such as Growth, Value, and Sentiment.

Of the 88 publicly traded companies in the Industrial – Machinery industry, MMM is ranked 48th. You can find other tops stocks in the industry by clicking here.

Is Now the Right Time to Buy?

If MMM can surmount its legal hurdles, the stock appears to be a solid play. The pressing question is how much cash MMM will have to pay in the form of settlements or court awards due to litigation. However, even if MMM loses these lawsuits, it will still continue to innovate. After all, the company spent nearly $2 billion on research and development in the prior year. Though this figure seems egregiously high, it accounts for a mere 6% of MMM sales.

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MMM shares were trading at $188.34 per share on Wednesday morning, up $0.01 (+0.01%). Year-to-date, MMM has gained 8.64%, versus a 5.00% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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