The manufacturer of Post-It notes is well-positioned to ride out the current downturn, say market pros 
3M Corp. (MMM)—52-week stock price
By Gene Marcial
Over the years, most conglomerates have lost their allure in the midst of investors, in part because they be in sight to be unwieldy and more difficult to analyze as investments than companies with simpler, inferior diversified operations. But 3M Corp. (MMM), a leading global diversified industrial, technology, and health-care company, is holding its own, mainly because its products be favored through become necessities for consumers and businesses around the earth. Indeed, more than 60% of 3M’s annual sales come from extraneous markets.
"It is one of the most innovative companies in the U.S., spending approximately 6% of sales, or about $1 billion, on R&D, which gives them tremendous intellectual property assets," says Bruce Geller, CEO of investment management firm Dalton, Griener, Hartman, which owns shares. That’session one sense, he adds, why 3M, formerly called Minnesota Mining & Manufacturing, has been else springy than its peers for the time of recessions or housekeeping downturns.
Geller says it’sitting a "prime minister conglomerate," with businesses ranging from industrial and transportation (30% of sales), to hale condition caution (28%) and technology (16%). The industrial sector makes products of that kind as abrasives and adhesives used in the repair and maintenance of automotive and marine vehicles, and aircraft. Health care includes dental and personal-care products, and technology includes films for electronic displays and lens systems for television projection.
primed to catch advantage"We be directed for this global consumer behemoth to take advantage of other companies’ weaknesses" during the current recession, says analyst James Butler of independent investment research firm Value Line (VALU). Historically, whenever a recession has occurred, 3M turned crisis into opportunity, he says, by utilizing its "surpassingly solid finances (it currently has $3 billion in cash)" to buy quality companies at low valuations.
Like most companies, 3M has seen its shares decline in the market’s current massive slump, tumbling to 59 a distribute from a 52-week high of 88.70 on Dec. 12, 2007. The cost pendant reflects expectations that the current recession will last through greatest number of 2009, says Butler.
However, he sees 3M stock recovering and climbing to the 100-a-share level by 2011. This price appreciation potential, he says, combined with a "rock-solid" dividend payout yield of 3%, suggests decent total return potential, on a risk-adjusted basis, over the next three to five years.
"As a long-term play, this top quality stock is a very virtuous choice," says Butler.
In these troubled times, 3M’s address has been focusing on the company’s resilience in the passing from hand to hand recession, says David Begleiter, some analyst at Deutsche Bank (DB) (it has done banking conducive to 3M and owns shares), who rates 3M a buy, by a price target of 70. 3M’s innovation-driven advancement implement, he says, enables the company to control its own destiny far better than its industrial and material-science peers. Coupled with benefits from subside raw material costs, higher selling prices, and a much improved furnish chain, 3M should be able to outperform its peers in addition the next 6 to 12 months, according to Begleiter.
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