2024-05-03 02:55:12 ET
Summary
- Spinoff stocks have outperformed the S&P 500 in the past six months, while shares of parent companies have also done well lately.
- 3M Company's spinoff of Solventum may result in the loss of its status as a dividend aristocrat, but the Industrials stalwart continues to work through litigation concerns.
- Despite challenges, 3M's strong free cash flow and cheap valuation make it an attractive investment, and I highlight key price levels on the chart to monitor.
- 3M issued a strong double-beat late last month, which augurs well for better days ahead.
There’s a significant rally under the market’s surface in one niche. Spinoff stocks have outperformed the S&P 500 over the past six months. Firms that have refocused management endeavors by separating one part of a conglomerate into a new entity have generally performed well lately. Notable spinoffs over the past year include Johnson & Johnson’s (JNJ) Kenvue (KVUE), General Electric’s (GE) GE Health Care (GEHC) and GE Vernova (GEV), Danaher’s (DHR) Veralto (VLTO), Kellanova’s (K) WK Kellogg (KLG), and 3M’s (MMM) Solventum (SOLV). ...
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For further details see:
3M: A Successful Spinoff And Strong Q1 Earnings