Honeywell International (NASDAQ:HON), 3M (NYSE:MMM), and Kimberly-Clark (NYSE:KMB) are the three biggest U.S. suppliers of N95 respirator masks, which have been in high demand by healthcare workers because of the coronavirus pandemic. 

To be clear, none of these companies are just "mask makers." They're all huge industrial stocks with varied segments and decent dividends. Kimberly-Clark, the smallest of the three, has 40,000 employees -- that's the population of a small town. Honeywell and 3M each have about 100,000 employees, enough to populate a mid-sized city.

That size helps make these companies nice long-term assets, because any segment that drags on results will likely be bolstered by others that are doing well.

Stethoscope on top of $100 bills.

Image source: Getty Images.

Honeywell International is back in the Dow

Honeywell's share price is down more than 5% year to date, though it has been slowly climbing for the past three months. Founded 93 years ago, the Morristown, N.J.-based company received good news on Monday: It will rejoin the 30-stock group that makes up the Dow Jones Industrial Average on Aug. 31 after a 12-year absence. That makes it more likely to be included in index funds, a nice boon for the stock. 

This has been a rough year for Honeywell, with revenue in the second quarter at $9.2 billion, down 19% year over year, and net income of $1.1 billion, down 29% from the same period in 2019. The hardest-hit of the company's four divisions is also its biggest: aerospace, which had a reported $2.5 billion in organic sales, down 27% year over year. That's unsurprising, given that the division makes aircraft engines, avionics (electronic systems for aircraft), and other aviation products and that air travel has declined because of the coronavirus pandemic. Two of Honeywell's other divisions -- building technologies and performance materials technologies -- have also been hit hard, with organic sales dropping a reported 17% in both.

The lone bright spot among its divisions has been safety and productivity solutions, which was up 1% year over year in the quarter. The segment manufactures personal protection equipment such as N95 masks, safety glasses, and face shields, along with other safety equipment.

While Honeywell is likely headed for its second consecutive year of declining revenue, there are reasons to be high on the stock beyond its addition to the Dow. First, it reacted strongly to the economic downturn and cut costs across the board, reducing staff and salaries, which enabled it to expand margins in the building technologies division and safety and productivity solutions division. Second, the company has very little debt and its adjusted free cash flow has been steadily growing, up to $6.3 billion last year.

The company has raised its dividend for nine consecutive years (but not yet this year) and its quarterly dividend of $0.90 gives it a yield of 2.17%.

Kimberly-Clark is having a solid year

Kimberly-Clark, founded 148 years ago and headquartered in Irving, Texas, is best known for its consumer products -- think Scott and Cottonelle toilet paper, Huggies diapers, and Kleenex tissues. But it also makes protective equipment such as coveralls, gloves, safety glasses, and of course, N95 respirator and surgical masks. 

Kimberly-Clark's shares are up more than 12% year to date, reflecting the way the company has increased its business during the pandemic.

Reported revenue in the second quarter was $4.6 billion, up just .003% year over year, but Kimberly Clark's six-month revenue of $9.6 billion is a bump up of 0.4% compared to the same period in 2019. Net income was up as well, at a reported $692 million in the second quarter, up 39.7% year over year. Six-month net income was a reported $1.3 billion, up 42% over the same period last year.

The Dividend Aristocrat has consistently raised its dividend for 48 years, with this year's 3.9% boost bringing it to a quarterly payment of $1.07 per share, which works out to a yield of 2.75%.

KMB Chart

KMB data by YCharts

3M shares are still dragging a bit

Shares of 3M are down more than 6% year to date. In the second quarter, the 118-year-old company, headquartered in St. Paul, Minn., reported earnings of $7.2 billion, a drop of 12.2% over the same quarter in 2019. Over the past six months, the company's reported earnings were $15.2 billion, a decline of 4% year over year.

The company has four segments: safety and industrial, transportation and electronics, healthcare, and consumer goods. Revenue was down in all of them. Healthcare, the division that manufactures N95 masks, anti-fog face shields, and other medical equipment, was the least affected -- down 0.4%. The consumer goods division saw sales decline 6.2%, safety and industrial was down 9.2%, and transportation and electronics was down 20.9%.

The good news is that the company's operating cash flow was a reported $1.9 billion, an improvement of 15% year over year. Management had slashed costs, so net income in the quarter was $1.28 billion, up 13.7%, despite headwinds from the global pandemic. For the first six months, net income was $2.58, up 27.5% year over year.

Like Kimberly-Clark, 3M is a Dividend Aristocrat, having raised its quarterly dividend 2% this year to $1.47 per share -- a yield of 3.57%. This is the 62nd consecutive year that 3M has increased its quarterly dividend.

Making a tough choice

I see positives in all three stocks. Kimberly-Clark may have the most growth, at least in the short term, because it doesn't have any segments dragging it down. Joining the Dow and improving its margins should give Honeywell momentum, especially as business picks up post-pandemic. However, my favorite of the three is 3M. The company has responded well to the pandemic and improved its margins, and has the best price-to-earnings ratio of the trio at 18.4. Plus, its dividend is the most enticing of the three in the long run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.