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3 Reasons To Buy 3M Stock Ahead Of Earnings

3M Company MMM, a large diversified technology company with leading positions in consumer and office supplies, will be releasing its Q2 earnings report on July 25.

3M, a Zacks Rank #2 (Buy), has become a model of consistency as it has defeated its earnings projections in fifteen of its past sixteen operational quarters. The company holds an Earnings ESP of 1.16%, and along with its strong Zacks Rank, this means 3M is more likely to accomplish the feat yet again.

If that’s not enough, here are three other reasons to maintain an optimistic view of 3M heading into earnings season:

1.       Strong Expansion Opportunities

3M’s diversified operations industry ranks in the top 31% of the Zacks Industry Rank, and on top of currently holding a “B” grade for Growth in our Style Scores system, 3M beats many growth-specific industry averages.

For example, 3M possesses a net margin of 16.78% and an impressive RoE of 47.08%, both of which compare favorably to the industry averages of 6.55% and 7.25%, respectively. Additionally, 3M’s current cash flow growth sits at 2.65%, which beats the industry average of 0.41%. Basically, 3M is exhibiting extensive growth prospects in comparison to its competitors.

2.       Impressive Sales Growth

3M has produced net sales growth throughout the company, including in its industrial/transportation and safety/graphics sectors. In Q2 2016, 3M’s industrial/transportation functions created sales of $2.6 billion, while its safety/graphics area produced sales around $1.5 billion. For the current quarter, our consensus estimates call for 3M’s industrial/transportation function to produce sales around $2.75 billion and its safety/graphics sector to create sales around $1.61 billion. This would represent year-over-year increases of 5.78% and 7.33% in each respective sector of the company.

These important stock drivers are from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>

3.       Large Brand Name

The 3M brand continues to be one of the most recognized and trust names around the world, with products such as Nexcare, Post-it, Scotch, and Scotchgard leading their industries. The company remains focused on inventing new products, providing higher returns to shareholders, and restructuring its assets while making investments in other lucrative markets.

This is evident in the company’s own sentiment, as 3M has already raised its earlier guidance for 2017 on strong quarterly results and improved business outlook. The company expects 2017 GAAP earnings in the range of $8.70-$9.05 per share, which represents year-over-year growth of 7-11%.

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