3M Company

(New York Stock Exchange)
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Neutral +5

After a Volatile Run, Here's the Honest Buy, Sell, or Hold on 3M

AI-generated analysis

πŸ“ˆ Shares of 3M have increased nearly 70% over the past three years, though they remain down 11% over the last five years.

🏭 3M is an iconic industrial giant with a diversified portfolio, but it has navigated a difficult and volatile period recently.

πŸ’° Although the dividend was reduced in 2024 due to a spin-off, it has since increased twice, signaling a return to growth mode.

πŸ“Š Adjusted earnings rose 10% in 2025 and nearly 14% in the first quarter of 2026, supported by a 2.1% dividend yield.

πŸ”€ The company spun off its healthcare division, Solventum (NYSE: SOLV), to raise cash for addressing legal issues.

βš–οΈ Major legal troubles involve earplugs sold to the military and production of forever chemicals, casting uncertainty over the future.

❌ Management cannot provide detailed information on ongoing legal proceedings, making it difficult for investors to track progress.

πŸ“‰ Adjusted earnings for 2025 excluded $1.95 per share in litigation-related expenses to avoid misleading growth figures.

⚠️ Long-term investors who have held through the volatility may not need to sell unless they are weary of the stock's swings.

🏭 Legal issues are expected to persist, keeping Wall Street reactive and maintaining volatility around the cyclical industrial sector.

πŸ“‰ The stock is currently trading nearly 15% below its 52-week high.

🚫 3M was not included in The Motley Fool's list of 10 best stocks to buy now, which favors potential monster returns.

πŸ“ˆ Historical examples from Stock Advisor show massive returns for past recommendations, such as Netflix and Nvidia on their respective lists.

πŸ’‘ The Motley Fool recommends 3M despite its exclusion from their current top picks, while also recommending Solventum.

Bullish Signals
  • Shares of 3M have risen nearly 70% over the past three years, signaling strong momentum.
  • The company's adjusted earnings grew by 10% in 2025 and rose nearly 14% in the first quarter of 2026.
  • 3M offers a well above market 2.1% dividend yield, which appeals to long-term income-focused investors.
  • The company has increased its dividend twice since the 2024 reduction, demonstrating that the dividend is back in growth mode.
  • The spin-off of Solventum provides the parent company with significant leeway to address material legal issues.
  • Adjusted earnings for 2025 included removing $1.95 per share of litigation-related expenses, improving reported profitability.
  • Management has a long history of rewarding investors with dividend increases.
Risk Factors
  • Shares of 3M remain down 11% over the past five years despite a recent rally, indicating lingering investor skepticism.
  • The company continues to be burdened by significant legal issues regarding earplugs sold to the military and 'forever chemicals' that are expected to linger as a dark cloud for years.
  • Management spun off its fastest-growing healthcare division, Solventum, primarily to raise cash specifically to address these material legal liabilities.
  • 3M is unable to provide specific information about ongoing legal proceedings, leaving investors exposed to high uncertainty without visibility into potential future costs.
  • Adjusted earnings figures include non-recurring litigation-related expenses; in 2025, the company removed $1.95 per share of these expenses from its reported adjusted earnings.
  • The stock is currently trading nearly 15% below its 52-week high, suggesting continued price pressure and sentiment headwinds.
  • Analyst volatility concerns persist as Wall Street continues to react negatively to legal news and the cyclical nature of the industrial sector.
  • The Motley Fool Stock Advisor excluded 3M from its top 10 buy recommendations for investors seeking monster returns, noting that 3M wasn't among the selected stocks.
Full Analysis
Shares of 3M (NYSE: MMM) have experienced significant market volatility, rising nearly 70% over the past three years while remaining down 11% over the last five years. The industrial giant continues to navigate a challenging period characterized by legal issues and a strategic restructuring that included spinning off its healthcare division, Solventum (NYSE: SOLV). This spin-off was designed to raise cash necessary for addressing material legal concerns related to military earplugs and forever chemicals, though these headwinds remain a persistent uncertainty. Management provided limited details on the ongoing legal proceedings, citing litigation-related expenses of $1.95 per share that were adjusted out of 2025 earnings. Despite the legal cloud, the company's business fundamentals have shown signs of recovery and stability. Adjusted earnings increased by approximately 10% in 2025 and rose nearly 14% in the first quarter of 2026. The company also maintains a strong history of rewarding shareholders; although the dividend was reduced in 2024, it has since been increased twice, currently offering a well-above-market yield of 2.1%. Long-term growth and income-focused investors may find these metrics appealing, but they must be prepared for continued volatility as Wall Street reacts to legal developments and the typical fluctuations of the cyclical industrial sector. The article concludes with mixed investment recommendations from The Motley Fool Stock Advisor. While the team notes that long-term resolution of legal issues is likely, they classify 3M as a stock investors should probably sell if they prefer to avoid uncertainty. Notably, 3M was not included in Stock Advisor's list of the 10 best stocks for investors to buy now, citing potential for "monster returns" with other picks like Netflix and Nvidia in historical comparisons. Ultimately, existing shareholders who have weathered the rollercoaster ride face a decision: hold through ongoing volatility or sell unless they are comfortable with the company's reduced growth trajectory post-Solventum spin-off.