Wall Street loves a good story, although it tends to focus on a single issue without taking the time to see the full picture of a company. That's likely what is happening with industrial giant 3M (MMM 0.19%) these days, as its legal and regulatory woes are getting a lot of attention. Granted, these are sizable issues, but they obscure the company's still-decent underlying results. Let me explain.

3M is dealing with some big negative numbers

3M recently pushed a division that makes earplugs into bankruptcy. The hope is that this move will help it limit the costs of product liability litigation the company faces over the earplugs and their use by the U.S. military. Before it's all done, the litigation is likely to cost billions of dollars. As part of the bankruptcy, 3M has already put aside $1 billion to help pay any potential claims. While the hope is that this move will help shield the parent company from further legal liability, it is far from clear at this point if the effort will pan out as hoped.

A hand drawing the world turnaround.

Image source: Getty Images.

The earplugs' liability issue is the big headline today, but there are other negatives waiting in the wings. Notably, the company long made use of chemicals that don't break down easily in the environment. Although it has since stopped using many of these chemicals, areas around some of its factories have to be cleaned up. There are big costs associated with this cleanup effort and it's complicated by the need to work with regulators to get cleanup plans approved. The costs here are potentially even more open-ended.

So there's a good reason why Wall Street is looking at industrial giant 3M with a glass-half-empty view at the moment. But that doesn't necessarily mean the company is a bad investment right now. In fact, the negatives pushed the share price down around 50% from peak levels seen in early 2018. The stock is off 30% in 2022 alone. That's pushed the dividend yield to a historically high level, currently around 4.7%.

3M has a solid history and decent results

The fact is, 3M is still generating enough earnings to keep increasing its dividend annually, something it has done for more than six decades, making it an elite Dividend King. It faced adversity a few times over the last 60-plus years and survived just fine. Investors might be making a mistake to simply write the company off at the moment.

Notably, the company posted adjusted organic year-over-year growth of 2% in the third quarter despite the fact that its respirator mask business is returning to normal. This single product line, which saw a huge demand spike early in the coronavirus pandemic, was a 1.4 percentage point headwind in the quarter. The industrial sector is highly cyclical and 3M is facing increasing headwinds, including on the inflation front. But organic sales are holding up reasonably well.

The organic sales strength is across the entire business. Each of the company's four divisions was up on this metric in the third quarter. And each of the divisions also posted 20%-plus adjusted operating margins. So while the backdrop isn't great, and the global economy increasingly looks likely to see growth stall, 3M is managing through the period in decent form.

3M stock is not for the faint of heart

It wouldn't be right to suggest that 3M is appropriate for all investors because there is a great deal of uncertainty and the risks are material. The stock is most appropriate for contrarian investors willing to hold on through what are likely to be some turbulent times as the company looks to turn its fortunes around. That said, it's worth noting that the company is in the process of spinning off its healthcare operations, which could be used as an excuse to cut the dividend.

Still, if history is any guide, 3M has a strong business that should survive today's headwinds. That fact, given the deep stock declines, could make today a great time to dip your toes into the shares.