Recently, Dow Jones Industrial Average stalwart 3M
Did investors overreact to this news? Is the financial press looking at the wrong story? I think so, because as usual they are focusing on the short term. For the first three quarters of the year, Triple M's profits were $2.27 billion, up 27% from $1.78 billion during the same period last year. Sales rose 10% to $14.92 billion from $13.51 billion a year ago. All this contributes to a profit margin of 15%. Here at the Fool, we love large profit margins.
Six of the company's seven units reported larger operating incomes this quarter. The only exception was the transportation division, where income was $105 million -- down $1 million from the year before. Read that last bit again, and you'll understand why 3M continues to be so successful. It has seven divisions pumping out products. Where other companies seek to grow via acquisitions, 3M just keeps making stuff. They've got thousands of products already, so imagination isn't something they lack.
Just looking around my house, I see the following 3M products: Scotch tape, tape dispenser, Scotch-Brite detergent (and pads), Oxy Carpet Cleaner, Post-It Notes, Scotchgard on my couch, Nexcare bandages, CD-ROMs, O-Cel-O Sponge cloth, Scotch Cassette Deck Head Cleaner, cushioned mailers, glue sticks, and Scotch micro-fiber cleaning cloth. And those are just the ones I know about. 3M has a presence in so many darn areas -- from security to electronics to health care to displays -- that I wouldn't be surprised if their cables ran under my home and their adhesives held my house together.
Finally, 3M's stock price has doubled over the past five years and quadrupled over the past 15 years. That's a nice, slow, steady return. Heck, it ain't Google
So how is it that a company that makes everything under the sun has not attracted the same attention as General Electric
Fool contributor Lawrence Meyers owns shares of General Electric but no other stocks mentioned in this article. However, he uses tons of 3M products.