Headquartered in Maplewood, Minnesota, US, the 3M Company is a diversified manufacturing and technology company. A true global powerhouse, 3M has operations in over 70 countries and sells over 60,000 products in more than 200 countries and territories worldwide. The company operates via four business segments: Safety and Industrial, Transportation and Electronics; Health Care; and Consumer. 3M was founded in 1902 as Minnesota Mining and Manufacturing Company and only formally acquired its current brand in the 21st century.
3M is a massive global success, but it is a company that almost failed after making its first steps. The company’s five founders had set off to mine for corundum, but it turned out that their prospecting fields only had anorthosite, a low-grade mineral that was practically worthless. But a shift in business focus saw the company produce its first hit product, sandpaper. The company has been an astute innovator and has produced useful iconic products such as masking tapes, surgical tapes, synthetic rubbers for astronaut boots, thermal insulators for clothing manufacturers, privacy computer filters, and gift-wrapping tape strips. The company has traditionally operated a robust research and development team that has made it an innovation leader. 3M averages over 3000 patents annually, and in 2014 it celebrated surpassing a milestone of over 100,000 patents around the world. Although 3M actively pursues organic growth inspired by constant innovation, the company has also sought inorganic growth by playing in the M&A pool. Some of the company’s most notable deals include the acquisitions of Acelity, Capital Safety, and Scott Safety.
3M was first listed on the NYSE in 1946. Its stock trades under the ticker symbol MMM (NYSE: MMM). MMM is categorized in the Industrials sector, under the Conglomerates industry.
3M Stock History
3M has had ten stock splits in its history, but only one has happened in the new millennium – a 2-for-1 in September 2003. 3M’s diverse and thriving business has made the MMM stock a great performer over the years.
The 3M share price traded at circa $25 at the turn of the millennium. It maintained an upward trajectory, and by late September 2007, it had posted a high of above $60. The effects of the 2008 Great Recession then weighed heavily on the MMM stock, triggering a dip to below $35 by March 2009. The stock then recovered impressively and embarked on a solid long-term rally that saw it print its all-high around the $260 area in January 2018. The subsequent correction was then overextended by the 2020 Great Lockdown, with the 3M share price plunging to lows of circa $110. Nonetheless, the stock has since recovered and continues to trade above $140 as of March 2022.
3M has traditionally been a generous dividend payer and is generally considered a Dividend King on Wall Street. The company has averaged a lucrative dividend yield of over 3.2% in recent years.
How to Trade 3M Stock
Here are some of the factors to consider when trading MMM stock:
Regulatory and Legislative Issues
3M’s wide-ranging operations ensure that the company faces diverse regulatory and legislative issues in the different jurisdictions where it has its footprints. Some of the issues the company has to deal with include tax laws, environmental concerns, health and safety protocols, labour issues, and affordable care laws in different countries. The company’s broad product portfolio also increases its risk exposure on laws that target literally any sector of the economy.
- New Product Rollout
3M’s successful history has been defined by the introduction of hit products in the market. The company now boasts a well-diversified portfolio, with over 60,000 products sold under multiple brands worldwide. It is important to note that over a third of 3M’s revenues come from products introduced within the last five years. The future of 3M will likely continue to be impacted by new product rollout. Hit products will inspire bullish sentiment towards MMM, whereas miss products will weigh heavily on the stock.
- Global Economic Conditions
As a company that sells a wide range of products worldwide, 3M generally benefits when the underlying global economy is in a boom. Overall favourable economic conditions positively impact its bottom line, which can inspire a higher stock price of 3M. On the other hand, an overall weak global economy will likely slow down 3M’s business numbers. This is why the stock recently tumbled during the 2020 covid19-inspired slowdown.
- Periodic Earnings Reports
3M’s fiscal year follows the calendar year, from January 1st to December 31st. The company releases quarterly and annual earnings reports to update investors on its business health and performance in the market. Generally, earnings that beat expectations tend to inspire higher stock prices, whereas those underwhelming tend to trigger lower stock prices.
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** Disclaimer –While due research has been undertaken to compile the above content, it remains an informational and educational piece only. None of the content provided constitutes any form of investment advice.