Money and Finance
It's time for another stock analysis report and this time I'll look at another dividend champion, 3M (MMM). 3M closed trading on Friday, January 11th at $96.28.
Company Background:
3M Company operates as a diversified technology company worldwide. The companys Industrial and Transportation segment offers tapes, coated and non-woven abrasives, adhesives, specialty materials, filtration products, energy control products, closure systems for personal hygiene products, acoustic systems products, and components and products used in the automotive, marine, aircraft, and specialty vehicles. Its Health Care segment provides medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products, health information systems, and food safety products. The companys Consumer and Office segment provides office supply, stationery, construction and home improvement, home care, protective material, certain consumer retail personal safety, and consumer health care products. Its Safety, Security and Protection Services segment offers personal protection products, cleaning and protection products for commercial establishments, safety and security products, roofing granules for asphalt shingles, corrosion protection products used in the oil and gas pipeline markets, and track and trace solutions. The companys Display and Graphics offers optical film solutions for LCD electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphics sheeting and systems; architectural surface and lighting solutions; and mobile interactive solutions. Its Electro and Communications segment provides electronic and interconnect solutions, micro interconnect systems, high-performance fluids, high-temperature and display tapes, telecommunications products, electrical products, and touch screens and touch monitors. 3M Company also offers electronic toll collection and parking management hardware and software.
DCF Valuation:
Analysts expect 3M to grow earnings 9.73% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $123.02. This means that at $96.28 the shares are undervalued by 21.7%.
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Money and Finance
3M Stock Analysis
It's time for another stock analysis report and this time I'll look at another dividend champion, 3M (MMM). 3M closed trading on Friday, January 11th at $96.28.
Company Background:
3M Company operates as a diversified technology company worldwide. The companys Industrial and Transportation segment offers tapes, coated and non-woven abrasives, adhesives, specialty materials, filtration products, energy control products, closure systems for personal hygiene products, acoustic systems products, and components and products used in the automotive, marine, aircraft, and specialty vehicles. Its Health Care segment provides medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products, health information systems, and food safety products. The companys Consumer and Office segment provides office supply, stationery, construction and home improvement, home care, protective material, certain consumer retail personal safety, and consumer health care products. Its Safety, Security and Protection Services segment offers personal protection products, cleaning and protection products for commercial establishments, safety and security products, roofing granules for asphalt shingles, corrosion protection products used in the oil and gas pipeline markets, and track and trace solutions. The companys Display and Graphics offers optical film solutions for LCD electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphics sheeting and systems; architectural surface and lighting solutions; and mobile interactive solutions. Its Electro and Communications segment provides electronic and interconnect solutions, micro interconnect systems, high-performance fluids, high-temperature and display tapes, telecommunications products, electrical products, and touch screens and touch monitors. 3M Company also offers electronic toll collection and parking management hardware and software.
DCF Valuation:
Analysts expect 3M to grow earnings 9.73% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $123.02. This means that at $96.28 the shares are undervalued by 21.7%.
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