02-24-2020, 10:19 PM
Regarding MMM, it's been on my watchlist for a while and I thought that now after yesterday's carnage it might be a time to take a closer look.
I'm comparing it to HON, as that is the one industrial conglomerate that I currently own so it works as a great benchmark.
This was just a quick comparison, by no means a full in depth thing. Looking at the data from past 5 years.
Both have pretty flat revenue.
Looking at operating income, income from continuing operations and EPS: MMM is pretty flat in all of them whereas HON has a nice upwards trajectory.
HON has been raising dividends 10-15% each year with a payout ratio that has been around 40% constantly.
MMM has been raising 6%-20% while constantly increasing their payout ratio which is currently at 72.6%.
I get that MMM looks cheap since it's essentially at the same price it was 5 years ago and significantly below it's high of almost $260. HON on the other hand may feel expensive since they have gone from $100 to $170 in those 5 years and are only about $10 below their all time high. And this is with two spin offs happening in the recent years.
But in fact they are both trading close to a P/E of 20, so on that metric they are about equally valued.
If MMM does get a lot cheaper then I might jump in for diversification but currently I just don't see why you guys are buying it instead of buying HON. They are essentially the same value but HON has a significantly better track record. The only thing going for MMM is the yield.
I'm comparing it to HON, as that is the one industrial conglomerate that I currently own so it works as a great benchmark.
This was just a quick comparison, by no means a full in depth thing. Looking at the data from past 5 years.
Both have pretty flat revenue.
Looking at operating income, income from continuing operations and EPS: MMM is pretty flat in all of them whereas HON has a nice upwards trajectory.
HON has been raising dividends 10-15% each year with a payout ratio that has been around 40% constantly.
MMM has been raising 6%-20% while constantly increasing their payout ratio which is currently at 72.6%.
I get that MMM looks cheap since it's essentially at the same price it was 5 years ago and significantly below it's high of almost $260. HON on the other hand may feel expensive since they have gone from $100 to $170 in those 5 years and are only about $10 below their all time high. And this is with two spin offs happening in the recent years.
But in fact they are both trading close to a P/E of 20, so on that metric they are about equally valued.
If MMM does get a lot cheaper then I might jump in for diversification but currently I just don't see why you guys are buying it instead of buying HON. They are essentially the same value but HON has a significantly better track record. The only thing going for MMM is the yield.