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