3M Co (NYSE: MMM)

Sector: Industrials Industry: Conglomerates CIK: 0000066740
Market Cap 100.16 Bn
P/B 8.66
P/E 20.62
P/S 3.16
ROIC (Qtr) 19.98
Div Yield % 3.27
Rev 1y % (Qtr) 2.05
Total Debt (Qtr) 12.60 Bn
Debt/Equity (Qtr) 2.68
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About

3M Company, known by its stock symbol MMM, is a diversified technology firm with a broad global footprint in several industries. The company's operations span across four segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. 3M's business model primarily revolves around the production and sale of a wide array of products and services. These offerings cater to diverse sectors such as construction, consumer goods, electronics, healthcare, and industrial manufacturing. The Safety and Industrial segment, one of...

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Investment thesis

Bull case

  • Healthy cash reserves of 5.24B provide 3.13x coverage of short-term debt 1.67B, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 2.31B provides strong 10.25x coverage of stock compensation 225M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.49B exceeds capital expenditure of 815M by 1.83x, indicating strong organic growth funding capability.
  • Retained earnings of 38.26B provide full 3.50x coverage of long-term debt 10.93B, indicating strong internal capital position.
  • Robust tangible asset base of 30.21B provides 4.45x coverage of working capital 6.79B, indicating strong operational backing.

Bear case

  • Operating cash flow of 2.31B provides thin coverage of dividend payments of (1.56B) with a -1.48 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of 1.35B provide weak support for R&D spending of 1.17B, which is 1.15x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Other non-current liabilities of 12.46B represent a high 0.41x of tangible assets 30.21B, suggesting significant long-term obligations without clear asset backing.
  • Free cash flow of 1.49B represents just -2.08x of debt issuance (716M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 1.31B relative to operating cash flow of 2.31B, which is 0.57x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Conglomerates
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HON Honeywell International Inc 155.07 Bn 32.79 4.14 34.58 Bn
2 MMM 3M Co 100.16 Bn 20.62 3.16 12.60 Bn
3 VMI Valmont Industries Inc 11.52 Bn 79.14 5.93 0.86 Bn
4 SEB Seaboard Corp /De/ 4.74 Bn 9.55 0.49 1.82 Bn
5 MDU Mdu Resources Group Inc 3.80 Bn 15.84 0.97 2.35 Bn
6 OTTR Otter Tail Corp 3.60 Bn 20.35 3.01 1.04 Bn
7 BBU Brookfield Business Partners L.P. 2.64 Bn -19.71 0.10 43.31 Bn
8 TTI Tetra Technologies Inc 1.44 Bn 11.77 2.33 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.89 1.07
EV to Cash from Ops. EV/CFO 17.47 26.27
EV to Debt EV to Debt 8.65 3.17
EV to EBIT EV/EBIT 13.87 28.37
EV to EBITDA EV/EBITDA 11.80 2.98
EV to Free Cash Flow [EV/FCF] EV/FCF 22.17 24.12
EV to Market Cap EV to Market Cap 1.09 2.07
EV to Revenue EV/Rev 3.44 3.10
Price to Book Value [P/B] P/B 8.66 0.16
Price to Earnings [P/E] P/E 20.62 -51.36
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.08 2.51
Dividend Payout Ratio % Div Payout % (Qtr) 48.30 16.94
Dividend per Basic Share Div per Share (Qtr) 2.92 1.03
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 105.26 -1.97
Interest Coverage Int. cover (Qtr) 0.00 4.08
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 27.23 -245.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.52 116.15
Dividend Growth (1y) % Div 1y % (Qtr) -19.11 -1.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -22.12 233.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -4.01 6.29
EBIT Growth (1y) % EBIT 1y % (Qtr) -14.55 58.90
EBT Growth (1y) % EBT 1y % (Qtr) -14.55 -70.32
EPS Growth (1y) % EPS 1y % (Qtr) -20.18 179.10
FCF Growth (1y) % FCF 1y % (Qtr) 113.30 22.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.69 19.56
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 0.64
Cash Payout Ratio Cash Payout (Qtr) 0.50 -0.01
Cash Ratio Cash Ratio (Qtr) 0.55 0.34
Current Ratio Curr Ratio (Qtr) 1.71 1.70
Debt to Equity Ratio Debt/Equity (Qtr) 2.68 -5.62
Interest Cover Ratio Int Coverage (Qtr) 0.00 4.08
Times Interest Earned Times Interest Earned (Qtr) 0.00 4.08
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.30 -14.03
EBIT Margin % EBIT Margin % (Qtr) 17.05 -16.67
EBT Margin % EBT Margin % (Qtr) 17.05 -20.17
Gross Margin % Gross Margin % (Qtr) 39.90 21.90
Net Profit Margin % Net Margin % (Qtr) 13.00 -21.67