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.
3M’s current yield is 4.77% and seems safe given their ability to generate cash flow and a strong balance sheet. However, it is also possible that these things could change in the face of the losses confronting the company. On the other hand, many other high-quality companies have faced similar circumstances and not only survived but thrived. Johnson & Johnson with its Tylenol, baby powder litigations and even companies like Altria that faced many lawsuits of their own. These companies survived and continue to. I for one am betting that 3M will follow suit. Nevertheless, there is no substitute for comprehensive and I might add continuous research and due diligence. But I do want to preface that last statement by pointing out that I am not concerned about what the price does, I am concerned with what happens to the fundamentals over the long-term.