Three M's for 3M Company

So today I opened a position of 1,298 shares of 3M Company (MMM) at $77.01, for a value of $99,983.98. I also added to my position of Wrigley's (WWY) call options, buying up 6 more contracts for $3.30. So I now have a total of 16 call options contracts for an averaged price of $3.4875, and a market value of $5,280.00. I may even consider buying up some more, because I'm hoping/pretty confident that there will be a price spike after the February 7th news. I had first mentioned the idea of buying Wrigley's call options contracts before the February 7th earnings announcement in the post Bought Some Steel Stock, & Wrigley Options.

3M Company had actually also been mentioned previously, in the post Six Stocks for 2006. 3M has an averaged forward/trailing price/earnings ratio of 17.7. It pays out a dividend yield of 2.2%, and has a very low debt equity ratio at 0.07.

Here are Three M's to pay attention to at 3M Company:

Money

3M is among the many larger corporations these days that is flush with cash. In fact, Harry Cohen and Scott Glasser go into this in more detail during the Smith Barney Appreciation Fund (SAPCX) report of September 30th, 2005:

• "In fact, corporations are flush with cash. For example, cash as a percentage of total assets of companies in the S&P 500 Index averages around 11%, which is very high by historical standards and indicative of balance sheet strength. In addition, corporations are generating significant amounts of free cash flow with free cash flow yields at approximately 6%, also high by historical standards. With a tax structure that is generally favorable towards stock ownership and dividends, it is no surprise that corporations have recently begun to increase their payouts. For example, so far this year, we have seen dividend increases of 26% for United Technologies, 17% for 3M Corp, 13% for Kimberly-Clark, and 12% for Procter & Gamble, just to name a few."
  

Management

3M had a high last year of about $86 per share before CEO James McNerney left to take up the reins at Boeing (BA). The stock price hit a low of $70 this past October. With the selection of George Buckley as the new CEO, the stock price should have some flexibility to move back up into the $80 range as "The Market" has a chance to judge his capability. Here is a great little audio bit by the Motley Fool group, over at NPR's "Fool Flashback."

Marketing

3M has a whole bunch of innovative products in the works which should help the company hit the ground running. Among the more interesting products are: A stethoscope that can help to reduce background noise when listening to heart and lung sounds, optical films for flat panel televisions, and RFID tagging technology for product management.