MMM - 3M: No Longer A Dividend Aristocrat - Still A Buy

2024-06-06 14:00:00 ET

Summary

• With the SOLV divestiture completed as of April 01, 2024, we believe that MMM is well poised to invest in its long-term opportunities.
• Reader must note that MMM's balance sheet is much healthier now, with the new management team and the settled legal issues implying fresh start ahead.
• The nearly halved dividends are to be expected as well, as the management expects to intensify their "investments in high growth and attractive end markets."
• Combined with MMM's inherent undervaluation and improving bottom-line performance through restructuring efforts, we believe that the stock remains a compelling buy.

We previously covered 3M ( MMM ) in January 2024, discussing its oversold status then, due to the highly effective cost optimization efforts, growing bottom-line, and nearly resolved legal settlements.

We had rated the stock as a Buy then, with us concluding that its dividend investment thesis remained robust with a potential capital appreciation as the headwinds subsided....

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