Tuesday, December 15, 2015

Watchlist: MMM

Today, all the major indices saw increases but MMM had a large 6% decline on decreased guidance. 3M is my favorite industrial and I always wanted to add more but the price is always high. At the moment it is sporting a 2.77% yield. It's still over my price point, but it's worth considering. I like 3M above a 3% yield. The Fed announcement about their decision to hike rates will be coming very soon, and may spike volatility in the market which may open large opportunities in high quality stocks for investors. When stock market sentiment goes bad, many investors who own index funds will sell. And index funds hold everything from junk to high quality names like 3M. People will throw the baby out with the bath water during panic sells, and buying quality companies that have unchanged fundamentals are best done during these times.

3M has paid dividends for 98 years and have been increasing the dividend for 57 straight years. Their dividend was last raised by 20% and I am expecting any day now for them to announce the increase for the 2016 year.

I may choose to add some more later this week. 3M below $137 will be a buy for me.

FastGraphs indicates in the last 20 years, MMM averages around a P/E of 20, which is approximately what it stands today.

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