The 3M Company’s strategic positioning following a major spinoff has created a more focused industrial enterprise with enhanced growth prospects. Its extensive global manufacturing footprint plus a significant U.S. presence provides competitive advantages in an environment of increasing supply chain localization and potential trade policy changes.
We particularly like the company’s diverse end-market exposure across automotive, aerospace, electronics, healthcare, and consumer applications. This profile provides natural hedging against sector-specific downturns while positioning it to benefit from multiple growth vectors including infrastructure investment, electrification trends, and safety regulation expansion.
Meanwhile, the stock trades at a reasonable 18.3 times its forecast earnings while paying a solid dividend. This pick has lots of upside over the long run.
3M COMPANY (New York symbol MMM; www.3m.com) makes more than 55,000 industrial and consumer product items, including Post-it notes, Scotch tape, Scotch-Brite cleaning products, Scotchguard protection and Thinsulate insulation.
3M has three main businesses: Safety & Industrial (45% of 2024 sales, 50% of earnings) makes hearing and eye protection devices, face masks, adhesives and tapes and industrial abrasives; Transportation & Electronics (35%, 31%) makes protective films, reflective signage for highways and packaging materials; and Consumer (20%, 19%) makes stationery products, home cleaning products and furnace filters.
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The Americas is the company’s biggest market, accounting for 55% of sales, followed by Europe, the Middle East and Africa (17%), Asia (16%) and China (12%).
3M spun off its Health Care division as a separate firm called Solventum Corp. (New York symbol SOLV) on April 1, 2024. That business makes products to treat and prevent infection in wounds; it also manufactures dental filling materials, and filtration and purification products.
Investors received one share of Solventum for every four shares of 3M they held. 3M retained a 19.9% stake in the new firm, but it plans to sell those shares within five years.
Dividend Stocks: 3M will relocate production to cut tariff costs
If you adjust for the Solventum spinoff, 3M sales in the three months ended March 31, 2025, rose 0.8%, to $5.95 billion from $5.74 billion a year earlier. That beat the consensus forecast of $5.75 billion.
The higher sales are mainly due to rising demand for products used in electronic devices, as well as industrial adhesives and tapes. Those improvements offset slower demand for automotive-related products and packaging materials.
Thanks to a cost-cutting plan, earnings before excluding unusual items gained 9.9%, to $1.88 a share from $1.71. That, too, exceeded the $1.77 consensus estimate.
3M expects new tariffs in the U.S. and other countries will add $850 million to its costs in 2025. The company makes its products in 26 countries, so it plans to adjust some of its production lines to reduce the tariff impact.
Despite those extra costs, 3M still expects to earn between $7.60 to $7.90 a share in 2025. The stock trades at a reasonable 18.3 times the midpoint of that range.
Due to the spinoff, 3M cut your quarterly dividend by 53.6% with the June 2024 payment. However, with the March 2025 payment, it raised the dividend by 4.3%. The new annual rate of $2.92 a share yields 2.0%.
Due to the spinoff, 3M cut your quarterly dividend by 53.6% with the June 2024 payment. However, with the March 2025 payment, it raised the dividend by 4.3%. The new annual rate of $2.92 a share yields 2.1%.
Thanks to that earlier cut, 3M’s annual dividend rate has now declined by an average 13.1% in the past 5 years. Its TSI Dividend Sustainability Rating is now Average.
Recommendation in Wall Street Stock Forecaster: 3M Company is a buy.
