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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
3M Company (XNYS:MMM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MMM
Name:
3M COMPANY (XNYS:MMM)
Sector:
587.00M
Industry:
Conglomerates
CEO:
Mr. Michael Roman
Total Employees:
95,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.06% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF 3M COMPANY(MMM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONGLOMERATES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
121.65
One Month Price Target:
$122.33
Six Month Price Target :
$125.71
Likely Price in One Year's Time:
Ticker:
$129.77
Likely Trading Range Today Under (Normal Volatility)
$121.24
Price Upper limit ($) :
$121.99
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$117.08
This week:
$111.42
This month :
$101.2
Other Primary facts
Market Cap:
66.42B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
569.60M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.6%
-9.54%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$142.90
$133.33
$100.40
$109.97
Medium risk (<10%) entry points
Buy Call
Sell Call
$130.21
Buy Put:
Sell Put:
$128.17
$113.06
$115.13
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MMM
Sharpe Ratio:
-2.20%
Comparison:
MMM, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -635.32% lower than the industry
& is -196.54% lower than the market/S&P 500 average
Average Returns/Yield of
MMM
Daily returns:
-0.03%
Weekly returns:
-0.16%
Monthly returns:
-0.62%
Yearly returns:
4.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is -260.36% below industry average
Classification:
MMM, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
MMM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.82%
Weekly Volatility:
4.06%
Monthly Volatility:
8.12%
Yearly Volatility:
28.13%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.75%
Volatility in last five trading days has been -3.43% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.76%
Weekly VaR:
-8.41%
Monthly VaR:
-16.81%
How Much Can the price of
MMM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-58.24%
This translates to price declining to:
$103.12
This translates to price declining to:
$50.80
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
MMM is a 18.67% riskier investment compared to the market/S&P 500 & is 1.66% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -18.01% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MMM
Beta in relation to market/S&P 500--0.99
Expected beta in 1 year's time:
0.739
Expected beta in 3 year's time:
1.045
Unlevered (debt free) Beta:
0.539
Beta in relation to Nasdaq (XNAS):
0.506
Beta in relation to all global stocks::
0.587
Beta Comparison & Analysis
Beta of competitors/peers::
1.058
Beta is -6.16% lower than peers
Average Industry Beta:
0.865
Beta is 14.86% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.18%
Sustainable growth rate is 45.73% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.174
Alpha is 294.24% above industry average alpha yield
Alpha is -1109% below the market average
Analysis of Cost of Capital of
MMM
Equity cost of capital:
0.100
Equity cost of capital is 9.70% above industry mean WACC
Unlevered (without debt) cost of capital:
5.41%
Before-tax cost of debt:
2.67%
After-tax cost of debt:
2.11%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.11%
WACC is 0.21% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$62.03
Revenue growth rate per share of (3Y):
4.62
Annual revenue growth rate is 2.47% above the industry average
EPS:
$9.60
Expected Annual growth rate of EPS (3Y):
8.51%
Expected future EPS growth rate is -1028.26% lower than the Conglomerates industry
Free cash flow (FCF) per share:
$8.90
Balance sheet equity growth per share: 8.87%
Equity growth rate per share is -777.48% lower than the industry
Debt per share
$27.05
EBITDA per share
$16.23
Valuation Analysis Today of
MMM
P/E Ratio:
17.01
P/E Ratio of Competitors/Peers:
17.92
P/E ratio is -5.05% lower than main peers & is -85.00% lower than the industry
Stock price/value with industry average P/E ratio: $1,089.06
MMM is -88.83% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $76.51
Present value of the expected future dividends only: $62.00
P/S (Price to Sales ratio):
1.96
Price to sales ratio is 18.97% above the industry mean
P/B (Price to book value ratio):
4.62
Price to free cash flow: 13.66
FALSE
Net income growth rate (3Y):
12.51%
Net income growth rate is -102.47% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 15.23%
Dividend yeild: 4.88%
Previous Dividend: $1.49
Previous adjusted dividend: $1.49
Previous Dividend: $5.94
Expected next dividend best case: $1.50
Expected next dividend worst case: $1.48
Average dividend payment (long-term): $1.47
Average dividend increase/decrease (growth rate) % per period: 0.34%
Expected next dividend payment date: 09/12/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 08/08/2022
Previous dividend payment date: 06/12/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 05/10/2022
Dividend History:
2022-05-19--$1.49
2021-11-18--$1.48
2021-05-20--$1.48
2022-02-17--$1.49
2021-08-20--$1.48
2021-02-11--$1.48
Dividend growth rate is -101.47% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
103.21%
Net debt to equity ratio:
95.78%
Debt to assets ratio:
33.60%
Net debt to assets ratio:
31.19%
Debt-to-asset ratio is -45.73% below industry average
Ability to repay debt:
Interest coverage ratio:
19.72
Interest coverage ratio is 696.20% more than industry average
Looking forward:
Debt growth rate:
-7.31%
Annual debt growth is -2% lower than industry average debt growth rate
Debt repayment rate in last quarter: 3.62%
Analysis of Key Statistics
Correlation of price movement with the market:
0.654
Statistical significance of correlation:
MMM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.578
Stock price is 13.19% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.578
Correlation of price movement with Nasdaq (^IXIC):
-0.005
Covariance of price movement with the market:
-0.005
Kurtosis
7.686
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.146
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MMM
Gross Profit Margin Ratio:
184%
Operating Profit Margin Ratio:
19.86%
Operating profit margin is 158.90% higher than the industry
Net Profit Margin Ratio:
184%
Effective Tax Rate:
18.48%
Effective tax rate is 9.88% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
37.48%
Return on equity (ROE) is 94.70% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.20%
Return on assets (ROA) is 108.01% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.58
Current ratio is -32.16% below industry average
Cash Conversion Cycle (days):
13.8
Cash conversion cycle is -67.73% below industry average
The remaining useful life of property plant & equipment is: 0.1 years
Stock based compensation to net income ratio:
2.41%
In-depth Efficiency Analysis
Revenue generated per employee:
371.9K
Each employee generates -8% less revenue than industry average revenue per employee
EBITDA generated per employee:
97.3K
Each employee generates 67% more EBITDA than industry average revenue per employee
Profit generated per employee:
58.9K
Each employee generates 83% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.2K
Each employee generates -549% less free cash flow than industry average revenue per employee
Assets/Capital per employee
330.6K
Each employee generates -549% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 6.18%
Growth rate in R&D investment/expenditure is -571.95% lower than the industry
Competitors/Peer firms of
MMM
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
GENERAL ELECTRIC COMPANY (XNYS:GE)
DEERE & COMPANY (XNYS:DE)
CATERPILLAR INC. (XNYS:CAT)
THE BOEING COMPANY (XNYS:BA)
ILLINOIS TOOL WORKS INC. (XNYS:ITW)
NORFOLK SOUTHERN CORPORATION (XNYS:NSC)
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
CANADIAN PACIFIC RAILWAY LIMITED (XNYS:CP)
Current Analyst Ratings
Strong buy�17%
Buy�4%
Hold�29%
Sell�13%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
35.33B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
19.10B
16.24B
1.95B
6.99B
6.99B
-
-
8.94B
30.00M
469.00M
1.91B
9.25B
7.02B
5.60B
6.86B
1.27B
5.60B
Statement of Cash Flow
Date:
Period:
459.00M
Differed Income Tax :
- 49000.00K
Stock Based Compensation :
135.00M
Change in Working Capital :
- 68000.00K
Accounts Receivables:
- 189000.00K
Other Working Capital:
-
Other Non-Cash Items:
- 769000.00K
Net Cash Provided by Operating Activities:
1.01B
Investments in PP&E:
- 424000.00K
Net Acquisitions:
13.00M
Purchases of Investments:
- 125000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.25B
112.00M
3.36B
4.82B
5.29B
988.00M
14.45B
10.25B
13.37B
5.14B
-
-
2.64B
31.40B
-
45.86B
3.16B
2.14B
274.00M
-
3.85B
9.15B
15.41B
6.29B
21.70B
-
30.85B
9.00M
46.06B
- 6834000.0K
-
March 31, 2022 at 6:00:00 AM
28.03B
14.93B
45.78B
-
17.55B
14.3B
217.00M
56.00M
- 263000.00K
- 579000.00K
-
- 773000.00K
- 852000.00K
150.00M
- 2054000.00K
- 11000.00K
- 1317000.00K
3.25B
4.56B
1.01B
- 424000.00K
587.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
MMM
2023
2024
2025
2026
2027
$130.42
$183.57
$195.82
$208.89
$222.83