It's hard to find a more diversified company than 3M (NYSE: MMM). About two-thirds of its $29 billion in trailing sales comes from abroad, and half of that from emerging markets. 3M has six reportable business segments, and though the industrial and transportation slice is a bit bigger, all of them are in the same ballpark in terms of sales and profits. This stock is basically an index fund unto itself.

But this one-stock fund trailed the Dow Jones Industrial Index (INDEX: ^DJI) by a fairly considerable margin in 2011, falling about 5% while the Dow gained 6%. What's up with that spread? Let's have a look at the year 3M had.

3M by the numbers

Year-to-Date Stock Return (5.3%), or (2.9%) with reinvested dividends
Dividend Yield 2.7%
Trailing P/E Ratio 14
1-Year Revenue Growth (TTM) 12.1%
Market Cap $57.5 billion
CAPS Rating (out of 5) *****

Sources: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS.

That's not the whole story
These figures paint the picture of a typical, mature conglomerate. The rock-solid dividend payouts are comparable to those of Honeywell (NYSE: HON) or United Technologies (NYSE: UTX), both of which are similar in size to 3M. But the Minnesotans hold the CAPS edge with a perfect five-star score.

That precious fifth star has been solid since 3M shares got cheap over the summer. A 97% approval rating from Foolish investors helped, but CAPS scores also depend on valuation metrics.

The funny thing is, 3M didn't do anything wrong to deserve lower prices. The company did report earnings right around the worst of the freefall, but it met analyst estimates and raised guidance on that occasion.

Investors have been treating 3M and other industrial stocks as proxies for the global economy amid the European debt crisis. That's fair enough on one level, given 3M's global and multi-industry reach, but then you're ignoring the fundamental strength of a brilliantly managed company. There's no doubt in my mind that 3M will bounce back.

Not all Fools agree, of course -- that's why they call us Motley. Fellow Fool and former 3M engineer Travis Hoium, for one, worries that the innovative spark may be gone from the company. To that point, I'd note that 32% of 3M's sales in 2011 came from products that were introduced in the past five years, and management aims for new inventions to provide 40% of revenues in the long term. CFO Dave Meline says 3M's business model is based on innovation, and I believe in that.

That's why 3M is a stock you could happily hold for the next 10 years or more, and also why I just placed a thumbs-up CAPScall on the stock. This stock is priced for absolute disaster, but 3M did nothing wrong in 2011.

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.