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Old 03-28-2023, 09:29 PM   #1
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3M

A solid dividend stock over the long term that keeps declining in value with no reason that I can see. What is going on?
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Old 03-28-2023, 11:27 PM   #2
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I have traded MMM over the years. My records show that I was out of MMM in 3/2021, due to a call option getting exercised, and I have not bought back.

The company's earnings are expected to be flat for the next 5 years. For comparison, Honeywell, a similar conglomerate, is expected to grow earnings at 7.9% for the next 5 years.

How accurate are these projections by analysts? Beats me. Source: Finviz.com.
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Old 03-29-2023, 07:11 AM   #3
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Also, a dividend stock will decline somewhat like a bond when interest rates rise.
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Old 03-29-2023, 07:28 AM   #4
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3M is based where I live. I have a union carpenter friend who works for them through a sub. He had been laid off for 3 weeks with little to no work at 3M campus, and told me he was looking for a new job because 3M has halted all capital projects for 3 years.

I used to own MMM when I thought I could be a stock picker, I have since learned the errors of my ways and just stick to buying the entire market.
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Old 03-29-2023, 07:32 AM   #5
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Occasionally, there are times when great companies are sold on the cheap, and these times are usually associated with negativity. It could be some adverse news, like a class action lawsuit in the case of 3M (MMM). https://fastgraphs.com/blog/fedex-a-...ian-investing/

3M (MMM) is currently facing many challenges; however, I believe management is up to the challenges. The company is currently trading at one of the lowest valuations it historically has. Therefore, I do believe 3M offers a great long-term opportunity (and I emphasize long-term), but not without risk. In this video I will cover the good, the bad, and the ugly factors facing this A+ rated company. https://www.advisorperspectives.com/...worth-the-risk

There's a class action lawsuit against 3M for earplugs. It looks very serious, with several ups and downs as you see in the NAV since 2018.

As a shareholder you can get totally hammered. I don't understand the lawsuit or proposed settlements, but it looks bad in the short.
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Old 03-29-2023, 07:49 AM   #6
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3M has some ongoing risks and the stock is probably going to remain challenged until that is put to bed.

Former owner of the stock. Made good money each time. Last sold long ago.
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Old 03-29-2023, 08:24 AM   #7
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As time goes on I find more and more comfort in a dividend fund. SCHD gets mentioned a lot, but there are others. Here are the holdings for SCHD: https://www.schwabassetmanagement.com/allholdings/SCHD

MMM is still a holding there, but it's more comforting to see it way down the list, with less than 2% allocated in the SCHD ETF.

100 companies are better than 1? We're down to 12 individual companies from about 3 dozen in late 2018.
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Old 03-29-2023, 09:10 AM   #8
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3M guided down earnings for 2023.

"For 2022, 3M earned $10.10 a share. Excluding the impact of business sales, the company earned about $9.88 a share. The adjusted number is still above what the company expects to earn in 2023. Guidance for the new year calls for per share earnings to come in between $8.50 and $9. Wall Street is projecting about $10.20."

Other than that the company is healthy financially currently.
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Old 03-29-2023, 09:28 AM   #9
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I'll sit on my $5k paper losses and not greedily gobble up more.
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Old 03-29-2023, 11:48 AM   #10
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There's a class action lawsuit against 3M for earplugs. It looks very serious, with several ups and downs as you see in the NAV since 2018.

As a shareholder you can get totally hammered. I don't understand the lawsuit or proposed settlements, but it looks bad in the short.
This is the issue - until this is resolved or at least damages are capped, how can you invest in 3M?
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Old 03-29-2023, 12:19 PM   #11
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This is the issue - until this is resolved or at least damages are capped, how can you invest in 3M?
You gamble a bit with money you will survive losing.
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Old 03-29-2023, 12:54 PM   #12
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Also, a dividend stock will decline somewhat like a bond when interest rates rise.
Serious question: why is that? Is it because investors can get the same yield with less risk?
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Old 03-29-2023, 01:12 PM   #13
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Serious question: why is that? Is it because investors can get the same yield with less risk?
A $100 today is worth more than $100 a year from now. The present value of the $100 a year from now can be valued in today's dollars using a discount rate. The discount rate can be thought of as a risk free rate plus some risk premium (depending on how risky the cash flow is). If the risk free rate goes up (i.e. Fed raises rates) then the discount rate increases as well.
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Old 03-29-2023, 01:13 PM   #14
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A $100 today is worth more than $100 a year from now. The present value of the $100 a year from now can be valued in today's dollars using a discount rate. The discount rate can be thought of as a risk free rate plus some risk premium (depending on how risky the cash flow is). If the risk free rate goes up (i.e. Fed raises rates) then the discount rate increases as well.
Long way of saying 'yes'.
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Old 03-29-2023, 01:59 PM   #15
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Has nothing to do with Dividends.

200,000 veterans are suing 3M. And unless this is resolved, new institutional investors will not touch 3M with even 10ft pole.

https://seekingalpha.com/article/456...ts-still-risky

"3M, the embattled maker of the CAEv2 earplugs, had a tough 2022. The company is currently being sued by over 200,000 veterans who allege that the company’s earplugs were defective and ineffective, resulting in hearing loss. 3M has resorted to the old playbook used by companies to avoid and deflect litigation, to little avail. In July, the company bankrupted the unit that made the earplugs, Aearo Technologies, and on the same day announced that it would pursue a spinoff of its healthcare unit. For those unfamiliar with corporate bankruptcies, filing for Chapter 11 is a tactic used to stall litigation because - generally - all lawsuits against a company are halted while the bankruptcy process plays out. Unfortunately for 3M, the tactic didn’t work and the bankruptcy judge allowed the suits to move forward unencumbered"
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Old 03-29-2023, 02:48 PM   #16
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In addition to the ear plug thing, due to an unfortunate acquisition, 3M was and is a very big player in the "forever chemicals" hoo-raw. I am not hampered by any real knowledge but my guess is that the latter situation is the bigger financial risk.
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Old 04-01-2023, 05:16 PM   #17
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Long way of saying 'yes'.
Yeah, but I appreciate the tutorial. I struggle with financial stuff myself and appreciate our members willing to share their opinions and expertise. YMMV
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Old 04-01-2023, 05:42 PM   #18
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Yeah, but I appreciate the tutorial. I struggle with financial stuff myself and appreciate our members willing to share their opinions and expertise. YMMV
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Old 04-01-2023, 05:56 PM   #19
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I bought my 1st 25 shares of 3M @ around $85 in August 2011
Added another 15 shares around $77 later that month.
Purchased lots of 20 at under $100 a share 3 times in 2012 & continued to DRIP.

Fast forward to 2017. 3M had a magnificent year. I can't guarantee this, but it seems like they raised the dividend 35%. I was feeling pretty smug. Here's what I'll never forget. Sometime late that year, or early 2018, when shares were closing in on $250, someone on the Yahoo message board asked if now would be a good time to initiate a position ?

I didn't make any friends on the board when I answered with "ultimately, you're the only one who can make that decision, but I wouldn't buy at these levels"

Bottom line is I held on & now I'm only up 17%.
What do I think of it today ?
I'm not going to add any new money, but I'll continue to reinvest dividends.
You just never know with all these lawsuits ?

Johnson & Johnson shares haven't suffered nearly as much as 3M, but they're in the same boat.
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Old 04-01-2023, 06:45 PM   #20
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Johnson & Johnson shares having suffered nearly as much as 3M, but they're in the same boat.


I think you meant “haven’t suffered nearly as much”? I have JNJ and yes they have legal overhang but it feels entirely different.
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