3M's Steady Hand More And More Valuable In A Weak Macro Environment

3M (NYSE:MMM) reminds me of a steady old draft horse. On a normal day, it'll plow your field at around 2.5 mph. On a great day, it'll plow your field at around 2.5 mph. On a terrible day, it'll plow your field at around 2.5 mph. In other words, 3M is probably not the name to go to when conditions in the broader global economy are screaming "growth!", but you'll appreciate what it can do when the global growth outlook bumps along a flat line.

I believe there are ways that 3M can, and should, improve its long-term performance. There's more margin leverage to be gained from efficiency/productivity improvements, and I would like to see the company shift more R&D spending toward disruptive innovation. As things sit today, the shares are not cheap on a discounted cash flow basis, but they don't look unreasonably priced on the basis of a relative valuation model that takes into account ROE, stability of performance, and interest rates. What's more, there aren't a surplus of great industrial names that are remarkably cheap.

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3M's Steady Hand More And More Valuable In A Weak Macro Environment