3M is one of these companies which I do not follow on a regular basis. This is because when I first analyzed company (read more) I found it rather expensive and since that time share are up by around 20% so it would be very difficult for me to buy shares.

Reminding, it is company with market cap $108b, net debt around $10b, EV/EBITDA around 13.5 and P/E = 22. Well, quite expensive.

How is business going?

Business is doing very well and as we can see profits are increasing everywhere apart from Electronics & Energy (According to CEO Inge Thulin: That business continues to be impacted by weaker demand and elevated channel inventories in the consumer electronics market.).

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As we can see guidance for 2016 is more or less the same. GAAP EPS was narrowed and dales projections were declined.

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It is worth to emphasize a high free cash flow conversion ratio. In Q2 company returned $1.5 billion to shareholders via dividends and gross share repurchases – decent result.

 

Summing up, I do not change my opinion that 3M is a great company to invest in a long term. I should have bought shares last time. Now I see no reason to buy shares and I hope that next time I analyze company I will not say that I was wrong again.

 

Disclaimer 3M – no position