3M Co (MMM) stock analysis

P/E above its 5-year median

3M's P/E of 28.1 is above its own 5-year median of 18.2.

P/E above the industry

3M's P/E of 28.1 is above the Surgical, Medical, and Dental Instruments and Supplies median of 27.7.

EV/EBITDA above its 5-year median

3M's EV/EBITDA of 17.5 is above its 5-year median of 13.6.

P/B above the industry

3M's price-to-book of 23.65 is above the Surgical, Medical, and Dental Instruments and Supplies median of 3.22.

Trading above fair value

The share price of $188.88 is above our fair value estimate of $156.77.

Margin of safety under 20%

The price is 20.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -1.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -16.2% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 4.0% over the last twelve months, against a 5-year average of -9.8% a year.

Growing slower than the industry

Revenue grew 1.7% over the last twelve months; the Surgical, Medical, and Dental Instruments and Supplies median is 11.0%.

Guidance raised

3M raised its full-year 2026 Adjusted total sales growth outlook on Jul 21, 2026.

Gross margin slipping

Gross margin was 39.5% over the last twelve months, against 40.9% a year earlier.

Return on equity over 15%

Return on equity was 80.8% over the last twelve months and averaged 36.4% over five years.

Return on capital over 10%

Return on invested capital was 28.5%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

3M's return on equity of 80.8% is above the Surgical, Medical, and Dental Instruments and Supplies median of -31.3%.

Earnings shrank over 5 years

Net income shrank 9.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 14.0% over the last twelve months, against a 5-year average of 8.1%.

Net margin above the industry

3M's net margin of 14.0% is above the Surgical, Medical, and Dental Instruments and Supplies median of -14.1%.

High debt

Debt is 363% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 146% five years ago to 363%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 24.2% of total debt.

Interest well covered

Operating income covers interest expense 5.5 times.

Short-term assets cover short-term debts

Current assets are 1.41 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.29; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

3M paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; 3M yields 1.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 45.3% of net income.

Covered by free cash flow

Dividends take 59.9% of free cash flow.