The process won't be complete until 2025, either, so there's still more to be done here before this exit is complete.Īdding to the complications, 3M is also looking to spin off its medical business. The issues surrounding these chemicals have pushed management to phase out their production, which itself will result in costly write-downs. The industrial giant is also dealing with issues surrounding its production of so-called "forever chemicals." This involves expensive efforts to clean up contaminated environments and is likely to lead to years of litigation. Given 3M's long history of success, it is reasonable to expect it to weather these problems well over time. While a deeper discussion of these headwinds could be had, they are really just part of any company doing business today. The most obvious issues facing the company today relate to inflationary cost pressures and the general ups and downs of its highly diversified business. Basically, 3M's business has been facing headwinds, with growth slowing to a crawl. And the most recent increase was a skinny 0.7%. Over the past three years the average was just a touch over 1%. Over the past five years the average was just shy of 5%. While the 10-year annualized dividend growth rate is nearly 10%, the figure has been falling. The dividend can help give a start in understanding what's going on. Before you pile in, however, know that Wall Street doesn't usually dump a stock like this without a good reason. All three of these measures sit at around half of their five-year average levels. Looking to more traditional valuation metrics, like the price-to-earnings, price-to-sales, and price-to-book value ratios, 3M remains an attractive option.
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