3M: A Dividend Cut Is Needed To Boost Price Recovery

Summary:

  • 3M’s stock price has declined over 60% since 2018 highs. These price declines happen for a reason and they should not be dismissed as only good entry points.
  • Weak earnings report, poor outlook, and numerous lawsuits reinforce the fact that a dividend cut is recommended to help the company’s recovery efforts.
  • The dividend yield sits at a high of 6.3%. The payout ratio is sustainable for now but when the settlements are due to be paid out, the sustainability may change.

3M tape manufacturing facility. This plant is part of the Industrial, Adhesives and Tape Division V

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Overview

The price has come down substantially on 3M and now has us all wondering if this makes for a good entry price. We’ve seen the price come down over 60% since the 2018 highs, but I still don’t feel convinced


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